Changes in accounting policies


The International Accounting Standards Board (IASB) has approved a number of changes to the existing International Financial Reporting Standards (IFRSs) and adopted several new IFRSs, which became effective for the RWE Group from fiscal 2009 onwards:

Collection of amendments to various IFRSs (2008) “Improvements to IFRSs”: The IASB released a collection of amendments as part of its “Annual Improvement Process.” It includes a number of minor IFRS changes, seeking to specify the rules and eliminate inconsistencies. Most of the amendments have already become effective for fiscal years starting on or after January 1, 2009. They did not have a material impact on the RWE Group’s consolidated financial statements.

IFRS 1 (2008) and IAS 27 (2008) “Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate” simplifies the initial recognition of investments in the separate financial statements of entities applying IFRS for the first time. They did not have an impact on the RWE Group’s consolidated financial statements.

Amendment of IFRS 2 (2008) “Vesting Conditions and Cancellations” clarifies the definition of vesting conditions in share-based payments and stipulates that all cancellations of share-based payments should receive identical accounting treatment, regardless of the party responsible for the cancellation. The first-time application of this amendment did not have any material impact on the RWE Group’s consolidated financial statements.

IAS 1 (2007) “Presentation of Financial Statements” contains new regulations on the presentation of financial statements. Above all, future non-owner changes in equity are to be strictly separated from owner changes in equity, and disclosure on other comprehensive income is to be extended. The application of IAS 1 (2007) will result in changes in the presentation of the RWE Group’s consolidated financial statements for the period ending December 31, 2009, and in extended disclosure in the notes.

IAS 23 (2007) “Borrowing Costs”: By revising IAS 23, the IASB abolished the option for the treatment of borrowing costs directly incurred in connection with the acquisition, construction or production of qualified assets. These borrowing costs must now be capitalised as part of the asset’s cost.

IAS 32 (2008) and IAS 1 (2008) “Puttable Financial Instruments and Obligations Arising on Liquidation” includes new rules for differentiating between liabilities and equity. Certain financial instruments that were previously classified as liabilities must be recognised as equity in the future. The amended rules do not have a material impact on the RWE Group’s consolidated financial statements.

IAS 39 and IFRS 7 Amendments (2008) “Reclassification of Financial Assets – Effective Date and Transition” present transitional regulations and clarification on the effective date of the option introduced in 2008, according to which certain non-derivative financial assets which were previously designated at fair value can be accounted for at amortised cost. Their first-time application did not have an impact on the RWE Group’s consolidated financial statements.

IFRIC 13 “Customer Loyalty Programmes” addresses the accounting of revenue in connection with loyalty award credit programmes offered by manufacturers or service providers directly, or via third-parties. The first-time application did not have a material impact on the RWE Group’s consolidated financial statements.