With the exception of the two changes described in the following, the accounting and measurement principles have remained unchanged in comparison with the previous year.
In May 2013, the International Accounting Standards Board approved the amended version of IAS 36 “Impairment of Assets,” which was adopted by the European Union on December 20, 2013. The amended standard is effective for fiscal years beginning on or after January 1, 2014. Merck made use of the possibility to apply the standard earlier, and has been applying the rules contained in the amended IAS 36 since January 1, 2013. The amendments to IAS 36 rescind the consequences of IAS 36 caused by the adoption of IFRS 13 “Fair Value Measurement”. At Merck, the changes related to the amended standard mean that the recoverable amount of cash-generating units with a significant carrying amount of goodwill are only to be disclosed if during the period an impairment or reversal of an impairment was recognized.
Apart from this change, in fiscal 2013 the expenses for Group functions to the operating divisions in the Segment reporting are no longer allocated to the operating segments, but rather disclosed fully in the column “Corporate and Other”. This change in disclosure relates exclusively to Segment Reporting and has no impact on the amounts disclosed in the consolidated income statement. A complete presentation of this disclosure change can be found under Note [52].
The main assets and liabilities disclosed in the consolidated balance sheet are measured as follows:
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Balance sheet items |
Measurement principle |
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ASSETS |
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Cash and cash equivalents |
Nominal value |
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Financial assets (current/non-current) |
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Held to maturity investments |
Amortized cost |
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Available-for-sale financial assets |
Fair value |
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Loans and receivables |
Amortized cost |
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Assets from derivatives (financial transactions) |
Fair value |
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Trade accounts receivable |
Amortized cost |
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Inventories |
Lower of cost and net realizable value |
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Other assets (current/non-current) |
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Assets from derivatives (operating business) |
Fair value |
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Receivables from non-income-related taxes |
Amortized cost |
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Other receivables |
Amortized cost |
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Income tax receivables |
Expected tax refunds based on tax rates that have been enacted or substantively enacted by the end of the reporting period |
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Assets held for sale |
Lower of carrying amount and fair value less costs to sell |
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Intangible assets |
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With finite useful lives |
Amortized cost |
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With indefinite useful lives |
Amortized cost (subsequent measurement: impairment only approach) |
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Property, plant and equipment |
Amortized cost |
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Deferred tax assets |
Undiscounted measurement based on tax rates that are expected to apply to the period when the asset is realized or the liability is settled |
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EQUITY AND LIABILITIES |
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Financial liabilities (current/non-current) |
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Bonds |
Amortized cost |
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Liabilities to related parties |
Amortized cost |
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Bank loans and overdrafts |
Amortized cost |
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Liabilities from derivatives (financial transactions) |
Fair value |
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Finance lease liabilities |
Amortized cost |
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Trade accounts receivable |
Amortized cost |
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Other liabilities (current/non-current) |
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Liabilities from derivatives (operating business) |
Fair value |
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Liabilities from non-income-related taxes |
Settlement amount |
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Other liabilities |
Settlement amount |
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Income tax liabilities |
Expected tax payments based on tax rates that have been enacted or substantively enacted by the end of the reporting period |
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Liabilities in connection with assets held for sale |
Fair value less costs to sell |
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Provisions (current/non-current) |
Present value of the expenditures expected to be required to settle the obligation |
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Provisions for pensions and other post-employment benefits |
Projected unit credit method |
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Deferred tax liabilities |
Undiscounted measurement based on tax rates that are expected to apply to the period when the asset is realized or the liability is settled |