Change in accounting policy (IAS 19)
The amended IAS 19 "employee benefits" implies that the corridor approach is eliminated and all actuarial gains and losses will be recognized in other comprehensive income as they occur and all past service cost will be recognized immediately in the income statement. Interest cost and expected return on plan assets will be replaced with a net amount that is calculated applying the same discount rate as when calculating the net defined liability and reported in the Group's finance net.
The Group's income statement is impacted as follows; pension costs that in prior periods were included in Earnings Before Interest and Tax (EBIT) are now divided so that all service costs will be reported in the income statement and interests together with expected return on plan assets will be reported net in the Group's finance net. Actuarial gains and losses will together with actual return on plan assets be reported in Other comprehensive income. The revised income statement is presented on aggreggated level in the excel file to the right.
The Group's balance sheet is affected by all previous actuarial gains and losses within the corridor which will now increase the net defined benefit obligation with the corresponding amount in Equity net of deferred tax. All actuarial gains and losses will, going forward, be reported in Other comprehensive income and thereby immediately impact the Group's net pension liability. Deferred tax is accounted for as a tax receivable and liability depending on the net tax position in the country to which the net pension liability refers. The changed net defined liability as of December 31, 2012 has been accounted for within Other comprehensive income. The restated balance sheet is shown aggreggated in the excel file to the right.