Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
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Consolidated financial statements - NOTES<br />
| 155 ><br />
This liability as of December 31, <strong>2012</strong> represents the estimated future payments required<br />
to settle the obligation resulting from employee service, excluding the component related<br />
to the future salary increases.<br />
Contribution expense was Euro 18.6 million and Euro 17.1 million for the years <strong>2012</strong> and<br />
2011, respectively.<br />
In application of IAS 19, the valuation of TFR liability accrued as of December 31, 2006<br />
was based on the Projected Unit Credit Cost method. The main assumptions utilized are<br />
reported below:<br />
<strong>2012</strong> 2011<br />
Economic assumptions<br />
Discount rate 3.25% 4.60%<br />
<strong>Annual</strong> TFR increase rate 3.00% 3.00%<br />
Death probability:<br />
Retirement probability:<br />
Those determined by<br />
the General Accounting<br />
Department of the<br />
Italian Government,<br />
named RG48<br />
Assuming the<br />
attainment of the<br />
first of the retirement<br />
requirements applicable<br />
for the Assicurazione<br />
Generale Obbligatoria<br />
(General Mandatory<br />
Insurance)<br />
Those determined by<br />
the General Accounting<br />
Department of the<br />
Italian Government,<br />
named RG48<br />
Assuming the<br />
attainment of the<br />
first of the retirement<br />
requirements applicable<br />
for the Assicurazione<br />
Generale Obbligatoria<br />
(General Mandatory<br />
Insurance)<br />
In order to take into account the uncertainties of the financial markets the Company<br />
decided to use a discount rate based on corporate bonds with a A rating as opposed<br />
to AA rating used in 2011. The change did not have a significant impact, estimated to<br />
be approximately Euro 2.1 million, on the calculation of the liability as of December 31,<br />
<strong>2012</strong>.<br />
Movements in liabilities during the course of the year are detailed in the following table:<br />
(thousands of Euro) <strong>2012</strong> 2011<br />
Liabilities at the beginning of the period 36,257 37,838<br />
Expenses for interests 1,606 1,685<br />
Actuarial loss (income) 4,532 (840)<br />
Benefits paid (2,687) (2,426)<br />
Liabilities at the end of the period 39,708 36,257