New standards and interpretations not yet effective

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2012, and have not been applied in preparing these consolidated financial statements. This includes the new standards that address the scope of the reporting entity. These standards – IFRS 10, IFRS 11, IFRS 12, IAS 27 and IAS 28 – are to be implemented conjointly and clarify definition of control as a prerequisite for inclusion in consolidated financial statements. None of these, nor any of the other new standards, amendments and interpretations, is expected to have a significant effect on the consolidated financial statements of Wessanen, except for IFRS 9 Financial Instruments and the revised standard IAS 19 Employee Benefits (IAS 19R).

IFRS 9 becomes mandatory for the Wessanen 2015 consolidated financial statements (when endorsed by the European Union) and could change the classification and measurement of financial assets. Wessanen does not plan to adopt this standard early and the extent of the impact has not been determined.

IAS 19R becomes mandatory for the Wessanen 2013 consolidated financial statements and changes the accounting for defined benefit plans and termination benefits. IAS 19R is effective for annual periods beginning on or after 1 January 2013 and requires retrospective  application with certain exceptions. Wessanen will adopt the amendments to IAS 19 in the Group’s consolidated financial statements for the period beginning 1 January 2013.

The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. IAS 19R requires the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminates the ‘corridor approach’ permitted under the previous version of IAS 19 as well as accelerates the recognition of past service costs. IAS 19R requires all actuarial gains and losses, net of tax effects, to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. Changes to defined benefit obligations will also be presented differently and will be split into three components: service cost, net interest and remeasurement.

If the revised standard would have been applied on 31 December 2012, the unrecognised actuarial gains and losses would be recognised through equity in “Other Comprehensive Income”, resulting in an increase in equity of €9.0 before tax. The impact on the income statement for 2012 is estimated to result in €0.5 lower service costs and €1.2 higher net interest costs.