Annual Review 2012 - Luxottica

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ANNUAL REPORT 2012
(d) income taxes. The Group is subject to different tax jurisdictions. The determination of
tax liabilities for the Group requires the use of assumptions with respect to transactions
whose fiscal consequences are not yet certain at the end of the reporting period. The
Group recognizes liabilities which could result from future inspections by the fiscal
authorities on the basis of an estimate of the amounts expected to be paid to the
taxation authorities. If the result of the above mentioned inspections differs from that
estimated by Group management, there could be significant effects on both current
and deferred taxes;
(e) valuation of goodwill. Goodwill is subject to an annual impairment test. This calculation
requires management’s judgment based on information available within the Group
and the market, as well as on past experience; and
(f) benefit plans. The Group participates in benefit plans in various countries. The present
value of pension liabilities is determined using actuarial techniques and certain
assumptions. These assumptions include the discount rate, the expected return on
plan assets, the rates of future compensation increases and rates relative to mortality
and resignations. Any change in the above mentioned assumptions could result in
significant effects on the employee benefit liabilities.
Earnings per share
The Company determines earnings per share and earnings per diluted share in accordance
with IAS 33 - Earnings per Share. Basic earnings per share are calculated by dividing profit
or loss attributable to ordinary equity holders of the parent entity by the weighted average
number of shares outstanding during the period. For the purpose of calculating the diluted
earnings per share, the Company adjusts the profit and loss attributable to ordinary equity
holders, and the weighted average number of shares outstanding, for the effect of all
dilutive potential ordinary shares.
Treasury Shares
Treasury shares are recorded as a reduction of stockholders’ equity. The original cost of
treasury shares, as well as gains or losses on the purchase, sale or cancellation of treasury
shares, are recorded in the consolidated statement of equity.
2. NEW
ACCOUNTING
PRINCIPLES
New and amended accounting standards and interpretations, if not early adopted,
must be adopted in the financial statements issued after the applicable effective date.
There are no new IFRSs or IFRICs (International Financial Reporting Interpretations
Committee) that are effective for the first time starting from January 1, 2012 and that
had a significant impact on the consolidated financial statements of the Group as of
December 31, 2012.
Amendments and interpretations of existing principles which are effective for reporting
periods beginning after January 1, 2013 and not early adopted
IFRS 9 - Financial instruments, issued in November 2009. The standard is the first step
in the process to replace IAS 39 - Financial instruments: recognition and measurement.