The consolidated financial statements of the Merck Group have been prepared in accordance with consistent accounting policies and in euros, the reporting currency. Pursuant to section 315a of the German Commercial Code (HGB), the International Financial Reporting Standards in force on the reporting date and adopted by the European Union as issued by the International Accounting Standards Board and the IFRS Interpretations Committee (IFRS and IAS, as well as IFRIC and SIC) have been applied.
The following rule was applied in advance as of fiscal 2013:
- Amendment to IAS 36 “Impairment of Assets”
This amendment was published in May 2013 by the International Accounting Standards Board, adopted by the European Union on December 20, 2013, and is effective for reporting periods beginning on or after January 1, 2014. The changes that early application involves are described in Note [5] “Accounting policies”.
The following rules take effect as of fiscal 2013:
- IFRS 13 “Fair Value Measurement”
- Amendment to IAS 1 “Presentation of Financial Statements”
- Amendment to IAS 12 “Income Taxes”
- Revised version of IAS 19 “Employee Benefits”
- Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards”
- Amendment to IFRS 7 “Financial Instruments: Disclosures”
- “Improvements to International Financial Reporting Standards 2009–2011 Cycle”
- IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”
As of fiscal 2012, Merck began applying the revised version of IAS 19 “Employee Benefits” in advance.
IFRS 13 “Fair Value Measurement” provides a uniform definition of fair value as well as principles for measuring fair value. It stipulates how fair value is to be measured when another standard requires fair value measurement or disclosures about fair value. Moreover, the application of IFRS 13 leads to more extensive disclosures in the notes to the accounts.
In accordance with the amendment to IAS 1, the components of the statement of comprehensive income have been grouped into items based on whether they will be reclassified to profit or loss in the future or will never be reclassified to profit or loss.
The disclosures required by IFRS 7 about the effect of netting arrangements on the financial position have been included in the consolidated financial statements.
Apart from the early application of the revised version of IAS 19, none of the other new standards had a material effect on the consolidated financial statements.
The following standards take effect as of fiscal 2014:
- IFRS 10 “Consolidated Financial Statements”
- IFRS 11 “Joint Arrangements”
- IFRS 12 “Disclosure of Interests in Other Entities”
- Amendments to IAS 27 “Separate Financial Statements”
- Amendment to IAS 28 “Investments in Associates and Joint Ventures”
- Amendment to IAS 32 “Financial Instruments: Presentation”
- Amendment to IAS 39 “Financial Instruments: Recognition and Measurement”
- Amendments to IFRS 10 “Consolidated Financial Statements”
- Amendment to IFRS 11 “Joint Arrangements”
- Amendments to IFRS 12 “Disclosure of Interests in Other Entities”
Merck currently does not expect the new rules to have any material effects on the consolidated financial statements. In particular, the rules contained in IFRS 10 to IFRS 12 will not lead to any material changes based on the current equity holding structures.
As of the balance sheet date, the following standards were published by the International Accounting Standards Board and the IFRS Interpretations Committee, but not yet adopted by the European Union:
- IFRS 9 “Financial Instruments”
- Amendment to IAS 19 “Employee Benefits”
- Amendment to IAS 39 “Financial Instruments: Recognition and Measurement”
- Amendments to IFRS 7 “Financial Instruments: Disclosures“
- Amendments to IFRS 9 “Financial Instruments“
- Annual Improvements to IFRSs 2010–2012 Cycle
- Annual Improvements to IFRSs 2011–2013 Cycle
- IFRIC 21 “Levies”
The impact that IFRS 9, which will become effective as of 2015 at the earliest, will have on the consolidated financial statements is currently being examined. At the present time, the other new rules are not expected to have any material effects on the consolidated financial statements.