Associates

Novo Nordisk A/S Period End 31 December 2010

Submitted by Alisdair on Wed, 2011-04-06 07:43

Gain on disposal included in share of profit of associates income statement line item
Danish healthcare company Novo Nordisk includes a DKK1.06 billion gain on disposal of an associate in its income statement line share of profit of associated companies.

Novartis AG Period End 31 December 2010

Submitted by Alisdair on Tue, 2011-03-15 08:07

Share of profit of associates not identified in income statement
Swiss pharmaceutical company Novartis includes in its income statement line item “income from associated companies” a gain arising from remeasuring to fair value its investment prior to obtaining control which results in no separately identified share of profit of associates and therefore falls short of IFRS.

Wolseley plc Period End 31 July 2010

Inventory expensed corrected to include deliveries between third parties
UK building materials supplier Wolseley has changed its accounting policy to include £901 million arising from deliveries between its suppliers and customers in inventory expensed, increasing the comparative total by 9.5%, with no effect on cost of sales or profit.

Associate impaired below net asset value
UK building materials supplier Wolseley writes off the £41 million net asset value of an interest in an associate as it considers the amount may be irrecoverable, reducing profit before tax by 14%.

Ashmore Group plc Period End 30 June 2010

Submitted by Company Reporting on Wed, 2010-10-20 11:38

Share of associate’s net assets lower than carrying value but impairment not recognised
UK investment manager Ashmore shows its share of an associate’s net assets as £0.6 million compared to a carrying value of £2.3 million but does not consider that this difference constitutes an impairment.

Randstad Holding NV Period End 31 December 2009

No information about whether an associate has been tested for impairment
Dutch recruitment company Randstad does not indicate whether an associate carried at €16.3 million has been tested for impairment in the light of its fair value being €8.6 million below the carrying amount.

Mediobanca - Banca di Credito Finanziario SpA Period End 30 June 2009

Upbeat equity accounting muffles significant unrecognised market value losses

Italian bank Mediobanca – Banca di Credito Finanziario reclassifies two more investments under 20% as associates, increasing to €646 million unrecognised losses relative to market price that amount to 11% of closing equity.

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DS Smith plc Period End 30 April 2009

Submitted by Company Reporting on Wed, 2009-08-19 23:00

Losses on investment in an associate reduce profit by 57%
UK packaging company DS Smith recognises £22.6 million losses on its investment in an associate arising from currency impacts that reduce its pre-tax profit by 57%.

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Orkla ASA Period End 31 December 2008

Gain on disposal inappropriately included in results from associates
Norwegian food and chemicals company Orkla includes a NOK830 million gain from disposal of its interest in an associate in results from associates in a presentation that is misleading and falls short of IFRS.

Share portfolio write-down leads to loss for year
Norwegian food and chemicals company Orkla recognises a NOK5.7 billion loss from impairments of financial assets, leading to a loss for the year, with further declines in carrying amount recognised in equity.

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Novartis AG Period End 31 December 2008

Submitted by Company Reporting on Mon, 2009-03-09 00:00

Impairment test result at odds with market value
Swiss pharmaceutical company Novartis recognises no impairment in an associate bought at US$141 per share, when the price falls to US$89, as its own calculations support a value of US$145, but it does little to explain the difference.

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Mediobanca - Banca di Credito Finanziario SpA Period End 30 June 2008

Submitted by Company Reporting on Thu, 2008-10-30 00:00

10.6% interest classed as an associate without adequate explanation
Italian bank Mediobanca - Banca di Credito Finanziario transfers its 1.54% share in Telecom Italia to a company it reclassifies as an associate, but its explanation of the reclassification lacks clarity.

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