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