5. Effects of New Accounting Standards

Revised and new IASB/IFRIC standards and interpretations that were mandatory for the first time in the financial year under review:

Standard

Content and Significance

IFRIC 21 Levies

The interpretation published in May 2013 clarifies when a company should recognise a liability to pay a levy imposed by the respective authorities. The interpretation is mandatory for financial years beginning on or after 17 June 2014. The HHLA Group holds significant property and is therefore subject to property tax, a levy within the meaning of IFRIC 21. The test to determine whether and when a liability must be recognised for property tax did not have any impact on HHLA’s Consolidated Financial Statements. There is no obligation to pay property tax as of the reporting date since the financial year corresponds to the calendar year.

Improvements to
IFRS 2011–2013 Cycle

The annual round of improvements published in December 2013 affects the following standards: IFRS 1 First-time Adoption of IFRS, IFRS 3 Business Combinations, IFRS 13 Fair Value Measurement and IAS 40 Investment Property. The amendments apply to reporting years which begin on or after 1 July 2014. IFRS 3, IFRS 13 and IAS 40 were adopted into European law with Commission Regulation No 2014/1361 of 18 December 2014. These were therefore applied by HHLA in financial year 2015; there was no effect on the Consolidated Financial Statements.

Amendments to standards that can be applied on a voluntary basis for the financial year under review that were not adopted by HHLA:

Standard

Content and Significance

Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations

In May 2014, the IASB approved amendments to IFRS 11 Joint Arrangements. The amendments include clarification of how the acquisition of interests in a joint operation should be reported in the balance sheet. These amendments should be taken into account for financial years beginning on or after 1 January 2016. Early adoption is permitted. The impact on HHLA’s Consolidated Financial Statements is currently being examined.

Amendments to IAS 1 Disclosure Initiative

The standard published in December 2014 clarifies how to exercise discretion in the presentation of financial statements. The amendments take effect for financial years that begin on or after 1 January 2016. Early adoption is permitted. The impact of these amendments on HHLA’s Consolidated Financial Statements is currently being examined.

Amendments to IAS 16
and IAS 38
Clarification of Acceptable Methods of Depreciation and Amortisation

The IASB approved amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets on 12 May 2014. The amendments provide guidance on which methods of depreciation and amortisation can be used for property, plant and equipment and intangible assets. EC Regulation 2015/2231 provides for application in financial years beginning on or after 1 January 2016. These clarifications have no impact on HHLA’s Consolidated Financial Statements.

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

The amendments published in November 2013 clarify a number of requirements laid out in IAS 19. The company will continue to deduct contributions paid by employees themselves or third parties for benefit plans offered by the company from the service cost in the future. This only applies if there is no link between the amount of the contributions and the employee’s years of service. The amendments can be applied to financial years beginning on or after 1 July 2014. According to Commission Regulation 2015/29 from 17 December 2014, the amendments must be applied to financial years beginning on or after 1 February 2015. This clarification will not have any impact on HHLA’s Consolidated Financial Statements.

Improvements to
IFRS 2010–2012 Cycle

The annual round of improvements published in December 2013 affects the following standards: IFRS 2 Share-based Payment, IFRS 3 Business Combinations, IFRS 8 Operating Segments, IFRS 13 Fair Value Measurement, IAS 16 Property, Plant and Equipment, IAS 24 Related Party Disclosures and IAS 38 Intangible Assets. The amendments take effect for financial years that begin on or after 1 July 2014. Commission Regulation 2015/28 stipulates that IFRS 2, 3 and 8 as well as IAS 24 must be applied to financial years beginning on or after 1 February 2015. HHLA does not anticipate any significant effects for the Consolidated Financial Statements.

Improvements to
IFRS 2012–2014 Cycle

The IASB published the 2012–2014 round of improvements on 24 September 2014, which affects to the following standards: IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, IFRS 7 Financial Instruments: Disclosures, IAS 19 Employee Benefits and IAS 34 Interim Financial Reporting. The amendments apply to reporting years which begin on or after 1 January 2016. They were adopted by the EU in Regulation 2015/2343, with provides for mandatory application in financial years beginning on or after 1 January 2016. These improvements will not have any impact on HHLA’s Consolidated Financial Statements.

IASB standards and interpretations that have not yet been adopted by the EU and have not been applied:

Standard

Content and Significance

IFRS 9
Financial Instruments

IFRS 9 Financial Instruments was finalised by the IASB in July 2014. This standard aims to simplify the requirements for reporting financial instruments in the balance sheet. Adoption is expected to be mandatory for financial years which begin on or after 1 January 2018. Early adoption is permitted. The impact of IFRS 9 on HHLA’s Consolidated Financial Statements is currently being examined.

IFRS 15
Revenue from Contracts with Customers

The IASB adopted the IFRS 15 standard, Revenue from Contracts with Customers, in May 2014. This stipulates the amount and timing of revenue reporting and what information must be disclosed. It replaces the existing guidelines on revenue recognition, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes. The amendment to IFRS 15 published in September 2015 postponed the effective date from 1 January 2017 to financial years beginning on or after 1 January 2018, subject to adoption into EU law. As a general rule, initial application is retrospective, although various simplification options are available; early adoption is still permitted. The HHLA Group cannot yet conclusively determine the effects of the initial application of the standard.

IFRS 16
Leases

The IASB published IFRS 16 Leases in January 2016. This standard supersedes the previously valid IAS 17 Leases and introduces significant accounting changes for lessees. As a general rule, all leases must now be recognised using the right of use approach. Under IFRS 16, lessors will continue to classify leases as operating or finance in line with IAS 17. The new rules aim to help improve the transparency of financial reporting and break down existing information imbalances. The effective date is 1 January 2019. Earlier adoption is permitted if IFRS 15 Revenue from Contracts with Customers is already applied. The HHLA Group cannot yet conclusively determine the effects of the initial application of the standard.

Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The IASB approved amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures in September 2014. These clarify how unrealised gains from transactions between an investor and a joint venture or an associate should be reported. The EFRAG announced in February 2015 that the process of endorsing these amendments had been suspended for the time being because inconsistencies had been identified between the amended standard and the existing IAS 28. The effective date – previously 1 January 2016 – has been postponed indefinitely until the inconsistencies have been resolved.

Standards and interpretations that have no relevance for HHLA’s Consolidated Financial Statements:

Standard

Content and Significance

Amendments to
IAS 16 and IAS 41

Agriculture:
Bearer Plants

Amendments to
IFRS 10, IFRS 12 and IAS 28

Investment Entities:
Applying the Consolidation Exception

IFRS 14

Regulatory Deferral Accounts

Amendments to IAS 27

Equity Method in Separate Financial Statements