Basis of presentation
General information on the Company
KION GROUP AG, whose registered office is at Abraham-Lincoln-Strasse 21, 65189 Wiesbaden, is entered in the commercial register at the Wiesbaden local court under reference HRB 27060.
The condensed consolidated interim financial statements were prepared by the Executive Board of KION GROUP AG on 3 November 2014.
Basis of preparation
The condensed consolidated interim financial statements of the KION Group for the nine months ended 30 September 2014 have been prepared in line with International Accounting Standard (IAS) 34 ‘Interim Financial Reporting’ and other International Financial Reporting Standards (IFRSs) as adopted by the European Union in accordance with Regulation (EC) No. 1606 / 2002 of the European Parliament and of the Council concerning the application of international accounting standards for interim financial statements. A condensed scope of interim reporting has been prepared in accordance with IAS 34.
All of the IFRSs and the related interpretations (IFRICs / SICs) of the IFRS Interpretations Committee (IFRS IC) that had been issued by the reporting date and that were required to be applied for financial years commencing on or after 1 January 2014 have been applied in preparing these condensed consolidated interim financial statements. These condensed consolidated interim financial statements do not contain all the information and disclosures required of a set of consolidated annual financial statements and should therefore be read in conjunction with the consolidated financial statements prepared for the year ended 31 December 2013.
The reporting currency is the euro. All amounts are disclosed in millions of euros (€ million) unless stated otherwise. The addition of the totals presented may result in rounding differences of +/– €0.1 million. The percentages shown are calculated on the basis of the respective amounts, rounded to the nearest thousand euros.
Financial reporting standards to be adopted for the first time in the current financial year
The following financial reporting standards were adopted for the first time with effect from 1 January 2014:
- IFRS 10 ‘Consolidated Financial Statements’
- IFRS 11 ‘Joint Arrangements’
- IFRS 12 ‘Disclosure of Interests in Other Entities’
- Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)
- Amendments to IFRS 10 ‘Consolidated Financial Statements’, IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 27 ‘Separate Financial Statements’: amendments relating to the consolidation of investment entities
- IAS 27R ‘Separate Financial Statements’
- IAS 28R ‘Investments in Associates and Joint Ventures’
- Amendments to IAS 32 ‘Financial Instruments: Presentation’: offsetting
- Amendments to IAS 39 ‘Financial Instruments: Recognition and Measurement’: amendments relating to the novation of derivatives and continuation of hedge accounting.
The first-time adoption of these standards has had no significant effect on the financial performance, financial position or notes to the interim financial statements of the KION Group.
Financial reporting standards released but not yet adopted
In its condensed consolidated interim financial statements for the nine months ended 30 September 2014, the KION Group has not applied – besides the standards and interpretations reported as at 31 December 2013 – the following standards, which have been issued by the IASB but are not yet required to be applied in 2014:
- IFRS 9 ‘Financial Instruments’
- Amendments to IFRS 10 ‘Consolidated Financial Statements’ and IAS 28 ‘Investments in Associates and Joint Ventures’: amendments relating to the sale or contribution of assets between an investor and its associate or joint venture
- Amendments to IFRS 11 ‘Joint Arrangements’: clarification relating to the acquisition of interests in joint operations
- IFRS 14 ‘Regulatory Deferral Accounts’
- IFRS 15 ‘Revenue from Contracts with Customers’
- Amendments to IAS 16 ‘Property, Plant and Equipment’ and IAS 38 ‘Intangible Assets’: clarification relating to revenue-based depreciation and amortisation
- Amendments to IAS 16 ‘Property, Plant and Equipment’ and IAS 41 ‘Agriculture’: amendments relating to the financial reporting of plants used to grow agricultural produce
- Amendments to IAS 27 ‘Separate Financial Statements’: amendments relating to the application of the equity method for subsidiaries, joint ventures and associates in separate financial statements
- Annual Improvements to IFRSs (2012 – 2014).
These standards are expected to be applied by the entities included in the KION Group only from the date on which they must be adopted for the first time. Their effects on the financial performance and financial position of the KION Group are still being analysed.
Basis of consolidation
As was the case at 31 December 2013, a total of 22 German and 77 foreign subsidiaries were fully consolidated in addition to KION GROUP AG as at 30 September 2014.
In addition, nine joint ventures and associates were consolidated and accounted for using the equity method (31 December 2013: eight). Two equity investments have been accounted for using the equity method since 1 January 2014 owing to their increased financial significance. One equity investment has become insignificant and is now accounted for at cost rather than using the equity method.
52 (31 December 2013: 53) companies with minimal business volumes or no business operations were not included in the consolidation. Baoli Material Handling Europe s.r.o., Prague, Czech Republic, was established in January 2014 and is carried at cost. STILL VILICAR d.o.o., Ljubljana, Slovenia, was dissolved in July 2014.
With the exception of the new and amended IFRSs described above, the accounting policies applied in these condensed consolidated interim financial statements are fundamentally the same as those used for the year ended 31 December 2013. These condensed consolidated interim financial statements are based on the interim financial statements of the parent company and its consolidated subsidiaries prepared in accordance with the standard accounting policies applicable throughout the KION Group.
Assumptions and estimates
The preparation of these condensed IFRS consolidated interim financial statements requires the use of assumptions and estimates for certain line items that affect recognition and measurement in the statement of financial position and the income statement. The actual amounts realised may differ from estimates. Assumptions and estimates are applied in particular:
- in assessing the need for and the amount of impairment losses on intangible assets, property, plant and equipment, and inventories;
- in determining the useful life of non-current assets;
- in classifying leases;
- in measuring options;
- in the recognition and measurement of defined benefit pension obligations, provisions for tax, and other provisions; and
- in assessing the recoverability of deferred tax assets.
The estimates may be affected, for example, by deteriorating global economic conditions or by changes in exchange rates, interest rates or commodity prices. Production errors, the loss of key customers and changes in financing can also impact on the Company’s performance going forward. Changes are recognised in profit or loss when they become known and assumptions are adjusted accordingly.