Download - Siemens Pakistan

Notes to the Financial Statements
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3.21 Business combinations
Business combinations are accounted for by applying the purchase method. The cost of acquisition is measured as the fair value of the asset given,
equity instruments issued and the liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.
Identified assets acquired are recognised at fair value at the acquisition date, irrespective of the extent of any minority interest. The excess of cost
of acquisition over the fair value of identifiable net assets acquired is recorded as goodwill.
3.22 Amendments to published standards and new interpretations effective in 2008
- Amendment to IAS 1, 'Presentation of Financial Statements - Capital disclosures'; introduces new disclosures about the level of an entity's capital
and how it manages capital. Adoption of this amendment has only resulted in additional disclosure given in note 41 to the financial statements.
- IFRIC 10 'Interim Financial Reporting and Impairment', prohibits the impairment losses recognised in an interim period on goodwill and
investments in equity instruments and in financial assets carried at cost to be reversed at a subsequent balance sheet date. This IFRIC does not
have any impact on the Company' financial statements.
- IFRIC 11 - IFRS 2 - 'Group and Treasury Share Transactions' provides guidance on whether share-based transactions involving treasury shares or
involving group entities should be accounted for as equity settled or cash settled share-based payment transactions in the stand alone financial
statements of the Company. This IFRIC does not have any impact on the Company's financial statements.
3.23 Standards, interpretations and amendments to published accounting standards that are issued but not yet effective
The following standards, amendments and interpretations of approved accounting standards are only effective for accounting periods beginning
on or after October 1, 2008 and except for additional disclosures are not expected to have a significant effect on the Company's financial
statements or are not relevant to the Company:
- IFRIC 12, 'Service Concession Arrangements' (effective from annual periods beginning on or after January 1, 2008). IFRIC 12 applies to
contractual arrangements whereby a private sector operator participates in the development, financing , operations and maintenance of
infrastructure for public sector service.
- IFRIC 14, 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' (effective from annual periods beginning
on or after January 1, 2008). IFRIC 14 provides guidance on assessing the limit in IAS-19 on the amount of surplus that can be recognised as an
asset. It also explains how the pension asset or liability may be affected by a statutory or contractual minimum funding requirement.
- IAS 29, 'Financial Reporting in Hyperinflationary Economies' (effective from annual periods beginning on or after July 1, 2008). The objective of
this standard is to establish specific standards for enterprises reporting in the currency of a hyperinflationary economy.
- IFRS 7, 'Financial Instruments: Disclosures' (effective from annual periods beginning on or after July 1, 2008). This standard requires extensive
disclosures about the significance of financial instruments for an entity's financial position and result of operations, and qualitative and
quantitative disclosures on the nature and extent of risks arising from financial instruments. It combines disclosure requirements from IAS-32,
Financial Instruments: Presentation, and IAS-30, Disclosures in the Financial Statements of Banks and Similar Financial Institutions, and adds new
disclosure requirements.
- IFRIC 13, 'Customer Loyalty Programmes' (effective from annual periods beginning on or after July 1, 2008). IFRIC 13 addresses the accounting
by entities that operate, or otherwise participate in, customer loyalty programmes for their customers.
- IFRIC 16, 'Hedges of a Net Investment in a Foreign Operation' (effective from annual period beginning on or after October 1, 2008). IFRIC 16
provides that the presentation currency does not create an exposure to which an entity may apply hedge accounting. It also specifies that hedging
instrument(s) may be held by any entity or entities within the group. Further, it also clarifies that foreign translation reserve in respect of the
hedging instrument, IAS 21 must be applied in respect of the hedged item.
- IAS 1, 'Presentation of Financial Statements' (effective from annual periods beginning on or after January 1, 2009). The objective of revised IAS
1 is to aggregate information in the financial statements on the basis of shared characteristics and is aimed at improving users' ability to analyse
and compare the information given in the financial statements. IAS 1 sets overall requirements for the presentation of financial statements,
guidelines for their structure and minimum requirements for their contents. It introduces the requirement to include in a complete set of financial
statements, a statement of financial position as at the beginning of earliest comparative period whenever the entity retrospectively applies an
accounting policy or makes a retrospective restatements of items in its financial statements, or when it reclassifies items in its financial
statements.
- IAS 23, (Amendment) 'Borrowing Costs' (effective from annual periods beginning on or after January 1, 2009). It requires an entity to capitalise
borrowing cost directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The option
of immediately expensing those borrowing costs will be removed.
- IFRS 2, (Amendment) 'Share-based Payment' (effective from annual periods beginning on or after January 1, 2009). It clarifies the definition of
vesting conditions, introduces the concept of non-vesting conditions, requires non-vesting conditions to be reflected in grant-date fair value and
provides the accounting treatment for non-vesting conditions.
- IFRS 8, 'Operating Segments' (effective from annual periods beginning on or after January 1, 2009). IFRS 8 replaces IAS-14, 'Segment Reporting'.
IFRS 8 requires a 'management approach', under which segment information is presented on the same basis as that used for internal purposes.
- IFRIC 15, 'Agreement for the Construction of Real Estate' (effective from annual periods beginning on or after January 1, 2009). IFRIC 15 provides