Rapport annuel 2018

90 | Galenica financial statements 2018 Finance Notes to the consolidated financial statements of the Galenica Group Amendments to IFRS As at 1 January 2018 Galenica adopted the following amended International Financial Reporting Standards: – IFRS 9 – Financial Instruments – IFRS 15 – Revenue from Contracts with Customers Galenica applied IFRS 9 and IFRS 15 in 2018 for the first time. Other IFRS changes had no impact for Galenica. Galenica recorded the impact of IFRS 9 as at 1 January 2018. The effect of initially applying IFRS 9 was recorded in retained earnings. Prior year numbers have been restated for the impact of IFRS 15 only. Galenica has not early adopted any other standard or interpretation that has been issued but is not yet effective. IFRS 9 replaces IAS 39 Financial Instruments and introduces new rules for classification and measurement, particularly for financial assets, for impairment of such assets and for hedge accounting. Galenica’s financial assets classified in the IAS 39 category “loans and receivables” as at 31 December 2017 have been allocated to the IFRS 9 measurement category “finan- cial assets at amortised costs” as they are held to collect contractual cash flows that are solely principal and interest pay- ments. No other changes in classification occurred due to the implementation of IFRS 9. The adoption of IFRS 9 has intro- duced new rules to account for impairment losses on financial assets measured at amortised cost. IFRS 9 requires that a forward-looking expected credit loss (ECL) model is applied rather than the incurred loss approach of IAS 39. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that Galenica expects to receive. Galenica has applied the simplified approach on trade receivables and has calculated ECLs based on lifetime expected credit losses. The cumulative effect recorded as at 1 January 2018 was a reduction in trade and other receivables of CHF 0.9 million, deferred tax liabilities of CHF 0.2 million and a decrease in retained earnings of CHF 0.7 million. IFRS 15 supersedes IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations and it applies to all revenue arising from contracts with customers that are in scope of the standard. Galenica has analysed the standard and concluded that it does not have an impact on the timing and amounts recognised but that certain reclassifications and thus amend- ments in the presentation of the consolidated statement of income are required as stated below. The impacts of the adoption of IFRS 15 are as follows: Consideration paid or payable to a customer: Galenica has historically presented on a gross basis certain payments made by suppliers and to customers that following the new guidance in IFRS 15 do not represent consideration for distinct goods or services provided by suppliers or by Galenica and are now recognised as a reduction of cost of goods and other operating costs, net sales and other income, respectively. Such payments include advertising arrangements, marketing support and slotting fees. Galenica has applied the full retrospective method upon adoption of IFRS 15 and thus has restated the consolidated state- ment of income for the period ending 31 December 2017, resulting in the adjustments as per the table below. in thousand CHF 2017 as reported Restatement IFRS 15 2017 restated Net sales 3,214,231 (73,060) 3,141,171 Other income 56,434 (33,450) 22,984 Operating income 3,270,665 (106,510) 3,164,155 Cost of goods (2,455,377) 70,233 (2,385,144) Personnel costs (427,667) — (427,667) Other operating costs (210,112) 36,277 (173,835) Share of profit from associates and joint ventures 4,448 — 4,448 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 181,957 — 181,957