4 Financial statements and changes in accounting policies

Financial statements18

Assets and liabilities on the balance sheet are classified as current and non-current. Items on the profit and loss account are presented by nature19. The statement of comprehensive income shows net profit integrated with income and expenses that are recognized directly in equity according to IFRS. The statement of changes in shareholders’ equity includes the comprehensive income for the year, transactions with shareholders in their capacity as shareholders and other changes in shareholders’ equity. The statement of cash flows is presented using the indirect method, whereby net profit is adjusted for the effects of non-cash transactions.

Changes in accounting policies

By Commission Regulation (EU) No. 475/2012 of June 5, 2012, the revised IAS 19 “Employee Benefits” (hereinafter “IAS 19”) has been endorsed. The new provisions of IAS 19 are applied retrospectively by adjusting the opening balance sheet as of January 1, 2012 and the 2012 profit and loss account. In the consolidated financial statements, the application of the new provisions of IAS 19 leads a pre-tax and post-tax effect amounting to, respectively: (i) a decrease of equity as of January 1, 2012 of €123 and €61 million; (ii) a decrease of equity as of December 31, 2012 of €269 and €155 million, whose €149 and €96 million related to the 2012 actuarial gains and losses recognized within other comprehensive income. The effect on the 2012 profit and loss account is not material. The presentation of net interest on defined benefit plans within the item “Finance income (expense)”, previously presented within the payroll costs, determined an increase of 2012 operating profit of €45 million.

Furthermore, starting from January 1, 2013, IFRS 13 “Fair value measurement” is effective (endorsed by Commission Regulation (EU) No. 1255/2012 of December 11, 2012) which provides a framework for fair value measurements, required or permitted by other IFRSs, and for the disclosures about fair value measurements. The effect of adoption of IFRS 13 is not material.

(18) The financial statements are the same reported in the Annual Report 2012, except for: (i) the statement of comprehensive income where, based on the amendments of IAS 1 “Presentation of Financial Statements”, other comprehensive income are grouped on the basis of their possibility to be reclassified subsequently to profit and loss account in accordance with the applicable IFRSs (reclassification adjustments); and (ii) the adoption of the new provisions of IAS 19, whose effects are described in the item “Changes in accounting policies”.

(19) Further information on financial instruments as classified in accordance with IFRS is provided in Note 35 – Guarantees, commitments and risks – Other information about financial instruments.