New accounting policies


The IASB has adopted further standards and interpretations which are not yet mandatory in the European Union. These IFRSs can only be applied if they are endorsed by the EU, which is still pending in some cases.

Collection of Amendments to various IFRSs (2009) “Improvements to IFRSs”: The IASB issued another collection of amendments as part of its “Annual Improvement Process.” It includes a number of minor IFRS changes aiming to specify the rules and eliminate inconsistencies. Most of the amendments become effective for fiscal years starting on or after January 1, 2010. Their impact on the RWE Group’s consolidated financial statements is currently being reviewed.

IFRS 1 (2008) “First-time Adoption of International Financial Reporting Standards” is a new version of IFRS 1, which has been restructured without changing its content. This revision becomes effective for the first time for fiscal years starting on or after July 1, 2009. It will not have an impact on the RWE Group’s consolidated financial statements.

IFRS 1 Amendments (2009) “Additional Exemptions for First-time Adopters” introduces further simplifications for first-time IFRS users switching to IFRS. The revision becomes effective for the first time for fiscal years starting on or after January 1, 2010. It will not have an impact on the RWE Group’s consolidated financial statements.

IFRS 2 Amendments (2009) “Group Cash-settled Sharebased Payment Transactions” specifies in particular how an individual subsidiary in a group must account for certain share-based payment arrangements in its own financial statements. Furthermore, the revised standard contains rules previously included in IFRIC 8 “Scope of IFRS 2” and IFRIC 11 “IFRS 2 - Group and Treasury Share Transactions.” Therefore, IFRIC 8 and IFRIC 11 were withdrawn by the IASB. This revision becomes effective for the first time for fiscal years starting on or after January 1, 2010. It will not have an impact on the RWE Group’s consolidated financial statements.

IFRS 3 (2008) “Business Combinations” contains amended regulations on the accounting for business combinations. In particular, these changes involve the scope of application of IFRS 3 and the treatment of successive share purchases. Furthermore, IFRS 3 (2008) offers companies an option: Non-controlling interests can be measured at fair value or at the proportionate share of net assets. Depending on which option a company exercises, any goodwill is recognised in full or only in proportion to the majority owner’s interest. IFRS 3 (2008) becomes effective for the first time for fiscal years starting on or after July 1, 2009. Its impact on the RWE Group’s consolidated financial statements is currently being reviewed.

IAS 27 (2008) “Consolidated and Separate Financial Statements”: In particular, by revising IAS 27, the IASB changed the regulations for the treatment of transactions with non-controlling interests of a group. Transactions which result in a parent company changing its ownership interest in a subsidiary without a loss of control are to be accounted for as equity transactions without an effect on profit or loss. Regulations for treatment in the event of a loss of control over a subsidiary were also changed: The standard regulates how deconsolidation gains or losses are to be calculated and how residual ownership interest in the former subsidiary is to be measured following a partial sale. The revision to IAS 27 becomes effective for the first time for fiscal years starting on or after July 1, 2009. The consequences for the RWE Group’s consolidated financial statements are currently being reviewed.

IAS 32 Amendments (2009) “Classification of Rights Issues” changes the issuer’s accounting treatment of specific foreign-currency subscription rights, options and warrants. In the future, these instruments must be classified as equity. Published on October 8, 2009, this new rule becomes effective for the first time for fiscal years starting on or after February 1, 2010. The consequences for the RWE Group’s consolidated financial statements are currently being reviewed.

IAS 39 Amendments (2008) “Eligible Hedged Items” provides clarification on issues in relation to hedge accounting. The amendments relate to the prerequisites for designating inflation risks as the hedged item. They also provide clarification on hedging one-sided risks. These amendments become effective for the first time for fiscal years starting on or after July 1, 2009. They are not expected to have a material impact on the RWE Group’s consolidated financial statements.

IFRIC 12 “Service Concession Arrangements” governs the accounting for arrangements in which a private company concludes a contract with a public agency for the supply of public services. The private company uses infrastructure which remains under public control. It is responsible for the construction, operation and maintenance of the infrastructure. IFRIC 12 becomes mandatory in the European Union for the first time for fiscal years starting after March 29, 2009. Its application is not expected to have a material impact on the RWE Group’s consolidated financial statements.

IFRIC 15 “Agreements for the Construction of Real Estate“ addresses the accounting treatment of real estate sales in cases where a contract is entered into with the purchaser prior to the completion of the construction work. This Interpretation primarily determines the conditions under which IAS 11 and IAS 18 are applicable and the point in time at which the corresponding revenue is realized. This Interpretation becomes effective in the European Union for the first time for fiscal years starting after December 31, 2009. It is not expected to have a material impact on the RWE Group’s consolidated financial statements.

IFRIC 16 “Hedges of a Net Investment in a Foreign Operation” clarifies uncertainties relating to the currency hedges of foreign operations. Above all, the Interpretation determines the risk that can be hedged, the group companies that are allowed to hold the hedging instrument, and the accounting treatment applicable in the event that the foreign entity is divested. This Interpretation becomes effective in the European Union for the first time for fiscal years starting after June 30, 2009. IFRIC 16 is not expected to have a material impact on the RWE Group’s consolidated financial statements.

IFRIC 17 “Distributions of Non-cash Assets to Owners” establishes regulations for the accounting of non-cash dividends. This Interpretation becomes effective for the first time for fiscal years starting on or after July 1, 2009. It is not expected to have a material impact on the RWE Group’s consolidated financial statements.

IFRIC 18 “Transfer of Assets from Customers” regulates the accounting treatment of assets which are transferred by a customer to a company for the purpose of connection to a network or to provide permanent access to a supply of goods or services. IFRIC 18 must be applied for the first time to the accounting of assets which are transferred on or after July 1, 2009. The consequences of this new rule for the RWE Group’s consolidated financial statements are currently being reviewed.

The following IFRSs, which have already become effective, are not being applied by the RWE Group as they are still pending EU approval:

IFRS 7 Amendments (2009) “Improving Disclosures about Financial Instruments” stipulates extended disclosure in the notes concerning financial instruments. In particular, in the future, a so-called “fair value hierarchy” must be presented, showing whether fair values of financial instruments are determined based on published market prices or unobservable internal company data. Furthermore, disclosure requirements for liquidity risks arising from financial instruments have been extended. The IASB has already mandated the application of these amendments for fiscal years starting on or after January 1, 2009. Their first-time application is expected to require additional disclosure in the notes to the RWE Group’s consolidated financial statements.

IFRIC 9 and IAS 39 Amendments “Embedded Derivatives” clarify the rules according to which, when reclassifying a financial instrument previously measured at fair value with an effect on profit or loss to the category “measured at amortised cost,” one must determine whether derivatives embedded therein must be separated. The IASB has already mandated the application of these amendments for fiscal years ending on or after June 30, 2009. Their first- time application is not expected to have an impact on the RWE Group’s consolidated financial statements.