talanx group annual report 2011 en

136
Financial statements Notes
General information
Talanx Group. Annual Report 2011
Accounting principles
and policies
Accounting policies
Segment reporting Consolidation,
business combinations
Non-current assets held for
sale and disposal groups
The annual financial statements of the subsidiaries and special purpose entities included in the
Group are governed by uniform accounting policies, the application of which is based on the principle
of consistency. In the following we will describe the accounting policies applied, any amendments
made to accounting policies in 2011 as well as major discretionary decisions and estimates.
Newly applicable accounting standards in the 2011 financial year are described in the section “General
accounting principles and application of IFRS,” while the consolidation principles are discussed
in the section “Consolidation” (pages 168 et. seq.).
Changes in accounting policies and accounting errors
In the 2011 financial year we retrospectively adjusted the prior-year figures with respect to the following
circumstances in accordance with the requirements of IAS 8 “Accounting Policies, Changes in
Accounting Estimates and Errors”:
a) In the second quarter of 2011, we made a retrospective correction in the Retail International segment,
which concerned the recognition of deferred tax liabilities for taxable temporary differences
in respect of goodwill. The differences related to an earlier company acquisition and were not
attributable to the first-time recognition of goodwill. In the opening balance sheet as at 1 January
2010, deferred tax liabilities increased by EUR 7 million, while retained earnings decreased by the
same amount. As a result of this adjustment, reserves fell by EUR 4 million, with EUR 3 million of
that amount relating to Group net income and EUR 1 million to “Other reserves” (contra items:
“Taxes on income” and “Deferred tax liabilities”).
b) With effect from 30 September 2011, the Group introduced uniform methods of recognising
insurance-related intangible assets in respect of insurance companies acquired in previous years
(PVFP) in the Retail Germany segment. As a result, the PVFP in favour of policyholders (balance
sheet item: “Other intangible assets”) was offset in the amount of the provision for deferred
premium refunds (balance sheet item: “Provision for premium refunds”) as measured and recognised
upon initial consolidation. The amendment of this accounting policy, along with the associated
adjustment of the amortisation patterns, was applied retrospectively. The amendment had
no effect on either Group net income or shareholders’ equity in any of the preceding reporting
periods. As at 31 December 2010, the balance sheet items “Other intangible assets” and “Provision
for premium refunds” were reduced by a total of EUR 268 million compared with the amounts
previously recognised. In the opening balance sheet as at 1 January 2010, each of these balance
sheet items was reduced by EUR 321 million.
c) In the fourth quarter of 2011, the Group harmonised the recognition of technical provisions
in the balance sheet. In accordance with the applicable US GAAP standards (FASB ASC 944–40;
formerly FAS 97), unearned revenue liabilities for life insurance contracts classified according
to the “universal life” model are recognised in the benefit reserve (previously recognised in the
unearned premium reserve). The change in the method of recognition had no implications for
Group net income or shareholders’ equity in any of the previous reporting periods. The unearned
premium reserve was consequently reduced by EUR 1,144 million as at 31 December 2010, while
the benefit reserve rose by the same amount. This modification resulted in a shift of EUR 78 million
in the consolidated statement of income between net premium earned and claims and claim
expenses (net). In the opening balance sheet as at 1 January 2010, this reclassification amounted
to EUR 1,223 million in both cases.