ETTEPLAN OYJ: PRELIMINARY INFORMATION ON THE IMPACTS OF THE CHANGEOVER TO IFRS
ETTEPLAN OYJ STOCK EXCHANGE RELEASE 23 FEBRUARY 2005 14.00 P.M.
PRELIMINARY INFORMATION ON THE IMPACTS OF THE CHANGEOVER TO IFRS
Etteplan Oyj has changed over to International Financial
Reporting Standards (IFRS) in its reporting as from
1 January 2005. This bulletin presents the opening IFRS
balance sheet dated 1 January 2004 and the most significant
impacts of the adoption of IFRS on Etteplan Oyj's reporting.
Etteplan Oyj will publish quarterly comparison information
on 2004 and the final reconciliation calculations required
under IFRS 1 in April 2005.
Due to the adoption of IFRS, the balance sheet total will
decline by tEUR 428 and shareholders' equity by tEUR 3.
The decrease in the balance sheet total is primarily due to
the changeover to the recognition of long-term projects on
the basis of their percentage of completion. The change in
the shareholders' equity is mainly due to the changeover to
percentage of completion recognition and the recording of
pension commitments.
PRINCIPAL IMPACTS ON THE ACCOUNTING POLICIES APPLIED
IN THE CONSOLIDATED FINANCIAL STATEMENTS
The table presents the differences between the balance
sheet dated 1 January 2004 as drafted in line with IFRS
and Finnish Accounting Standards (FAS).
The following accounting policy changes affect Etteplan
Oyj's reporting:
Intangible assets
The decrease in intangible assets is due to the transfer
of capitalized basic improvement expenses of rented
properties into tangible assets in the opening IFRS
balance sheet. In the IFRS financial statements, goodwill
items will no longer be amortized after 1 January 2004.
Goodwill items on the adoption date have been tested for
impairment as per IAS 36 and there were no grounds for
recognizing impairment. In future, goodwill impairment
tests will be carried out at least annually and always
when indications of possible impairment have been observed.
Property, plant and equipment
Assets leased with agreements that are classified as finance
lease agreements have been capitalized in non-current assets
in the balance sheet at the fair value of the rented asset or
the present value of the minimum rents, whichever is lower.
Rental obligations arising from finance lease agreements are
presented in interest-bearing non-current and current
liabilities. Finance leasing leads to depreciation and interest
expenses on assets capitalized during the financial periods.
Assets acquired by means of a finance lease agreement are
depreciated over their economic lifetime. If the Group does
not assume ownership of the asset at the end of the lease
period, depreciation is recorded over the lease period or
the economic lifetime, whichever is shorter.
Construction contracts
Contracts whose outcome can be assessed reliably are
recognized as income and expenses on the basis of the
percentage of completion at the time of calculation. The
percentage of completion of a contract is evaluated on the
basis of project progress and the proportion of working
hours completed to the total number of hours required to
complete the contract. In the case of contracts whose outcome
cannot be assessed reliably, the amount of income recognized
does not exceed the expenses. The total loss on a contract
that will probably turn a loss is expensed immediately.
Investments available for sale
Available-for-sale financial asset securities are recorded at
their fair value on the closing date.
Employee benefits
The Group's pension arrangements are mainly defined contribution
plans. The exception to this comprises defined-benefit
occupational pension arrangements under the Finnish Employees'
Pension Act (TEL), which are booked as current liabilities on
the basis of actuarial calculations. The Ministry of Social
Affairs and Health has approved certain revisions to the
accounting policy applied to occupational disability pension
commitments. These revisions will come into force on 1 January 2006.
Following the changes, the TEL disability element will be treated
as a defined-contribution scheme in the IFRS financial statements
and the bulk of the occupational disability pension commitments
are recognized in the last quarter of 2004.
Deferred tax liabilities and assets
In the IFRS balance sheet, deferred taxes have been recognized
on all the temporary differences between accounting and taxation.
The major differences compared with the previous practice are due
to the deferred tax asset recorded on pension commitments and the
deferred tax liability recorded on the basis of the percentage of
completion recognition of construction contracts. The tax base in
force at the time of calculation is used to determine the deferred
taxes.
Other impacts
The differences between non-current liabilities and current
liabilities compared with FAS are due to the rental obligations
on finance lease liabilities recorded in the balance sheet.
In addition, current liabilities also include pension commitments
recorded as debt.
Hollola, 23 February, 2005
Etteplan Oyj
Board of Directors
For additional information, contact: Financial Director
Ritva Mönkkönen, tel. +358 3 872 9012, GSM +358 400 485 878.
DISTRIBUTION: Helsinki Exchanges
Principal media
www.etteplan.com
OPENING BALANCE 1.1.2004
ETTEPLAN OYJ
tEUR FAS IFRS Balance
1.1.2004 impact sheet
IFRS
ASSETS 1.1.2004
Non-current assets
Intangible assets 4 308 -313 3 995
Property, plant and equipment 3 361 334 3 695
Other non-current assets 443 -21 422
Non-current assets, total 8 112 0 8 112
Current assets
Inventories 843 -843 0
Trade receivables and
other receivables 10 518 157 10 675
Investments available for sales 796 258 1 055
Cash and cash equivalents 5 810 0 5 810
Current assets, total 17 968 -428 17 540
ASSETS TOTAL 26 080 -428 25 652
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 427 0 427
Share premium account 5 058 0 5 058
Own shares 0 -1 -1
Retained earnings 6 887 -2 6 885
Shareholders' equity, total 12 372 -3 12 369
Minority interest 2 194 0 2 194
Non-current liabilities
Non-current interest-bearing
liabilities 1 065 15 1 080
Non-current liabilities, total 1 065 15 1 080
Current liabilities
Pension liability 0 134 134
Instalment of non-current
liabilities 0 150 150
Current interest-bearing
liabilities 0 10 10
Trade and other payables 10 249 -741 9 509
Tax liabilities 198 8 206
Current liabilities, total 10 448 -439 10 008
Liabilities, total 11 513 -425 11 088
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 26 080 -428 25 652
CHANGES IN SHAREHOLDERS' EQUITY(tEUR)
1.1.2004
Shareholders' equity FAS 12 372
IAS 11 Construction contracts 163
IAS 12 Deferred tax receivables and
liabilities -8
IAS 17 Leases -3
IAS 19 Employee benefits -134
IAS 32 Own shares -1
IAS 36 Other non-current assets,
value decrease -20
IFRS-impact, total -3
Shareholders' equity IFRS 12 369
