Swiss GAAP FER vs. IFRS Overview of main …

1 2014 Deloitte AG. All rights gaap FER vs. IFRSO verview of main differencesIFMA Lunch meeting 11 February 2014H tel d Angleterre, Gen ve 2014 Deloitte AG. All rights standards in the spotlightSwiss gaap FER vs. ifrs IFMA presentation2 2014 Deloitte AG. All rights of overCHF 40 millions+125employeesIntroductionIFRS vs. Swiss gaap FER: An equal fight?3 ifrs FoundationAround 30members+budget ofCHF 100 000 Swiss gaap RPCS wiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights of companies applying ifrs and Swiss gaap FERIFRSS wiss gaap RPCS wiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG.

2 All rights developments in Switzerland5 Since 2013: Swatch Group Georg Fischer Bachem Holding Meyer BurgerSwiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSO verview of main differences6 Constant evolutionStabilityPrinciple basedPrinciple basedInternational recognitionNational recognitionAccepted by SIX Swiss Exchange(all indices)Accepted by SIX Swiss Exchange(Domestic index only)IFRSS wiss gaap FERS wiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSE mployee benefits7 Defined benefit or defined contribution plan Concept of matching cost and revenue Actuarial valuation required for defined benefitplans 2013: application of IAS 19 revised and itsimpact on key financial indicators for a majorityof companies Extensive information to disclose in the notes tothe financial statements on the differentassumptions followed and sensitivity analysis No distinction based on the type of plans Economic effects are determined based on thefinancial situation of the pension fund Disclosures required remain limitedIFRSS wiss gaap FERS wiss gaap FER vs.

3 ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSG oodwill8 Goodwill is considered as an intangible assetwith indefinite useful life Goodwill is not amortised and is subject to ayearly impairment test Negative goodwill is presumed to beimprobable and must be recognised in thestatement of income Information to be disclosed in the notes relatingto assumptions used when performingimpairment test Based on ifrs 3R, acquisition costs should berecorded directly in the income statement 2 accounting treatments are accepted underSwiss gaap FER Option 1 : goodwill is accounted for as anintangible asset and has to be amortisedover 5 years (possibility to extend to 20years) Option 2 : goodwill is accounted for as adiminution of equity at the date of acquisition The case of negative goodwill is not explicitlymentioned.

4 Accounting treatment followed willhave to be disclosed in the notes Acquisition costs are included in the acquisitionpriceIFRSS wiss gaap FERS wiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSI ntangible assets9 Intangible assets acquired externally arecapitalised if they meet the criteria of an asset Development costs must be capitalised ifspecific conditions are met Amortisation is performed over the economicuseful life No amortisation for intangible assets with anindefinite useful life. Impairment test has to beperformed every year Intangible assets acquired externally arecapitalised if they meet the criteria of an asset Development costs can be capitalised if theymeet specific criteria Amortisation is performed over the economicuseful life Intangibles with an indefinite useful life areamortised over 5 years, with a possibility toextend to 20 years if appropriateIFRSS wiss gaap FERS wiss gaap FER vs.

5 ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSF inancial instruments hedge accounting10 IAS 39 defines 4 categories of financialinstruments Very detailed information on the application ofhedge accounting Conditions for application of hedge accountingare very restrictive Efficiency tests must be performed bothprospectively and retrospectively ifrs 7 requires detailed information to bedisclosed in the notes on risk exposure and riskmanagement 6 categories of financial instruments exist asper Swiss gaap FER Hedge accounting is accepted No specific information on the type of risk thatcan be hedged nor on the hedging instrumentthat can be used No

6 Requirement for efficiency tests Limited disclosures requiredIFRSS wiss gaap FERS wiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSP resentation of the financial statements11 Detailed information required to be disclosedfor most of the accounting topics Information to be disclosed in the notes to thefinancial statements can be found either in thestandard dedicated to the presentation (IAS 1)or in other specific standards The concept of extraordinary income does notexist The statement of income must be completed bythe statement of other comprehensive income(OCI) Extensive information is required for listedcompanies (segment information for example)

7 Limited information to be disclosed in the notesto the financial statements as per Swiss GAAPFER The statement of income must me splitbetween income from operations, nonoperating income and extraordinary income The concept of Other Comprehensive Incomedoes not exist Published in 2013, RPC 31 includes additionalinformation to be disclosed for listedcompanies (first application, share basedpayments, segment information, )IFRSS wiss gaap FERS wiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights gaap FER vs. IFRSC onclusion12 True and fair view principle Targeted companies: small tomedium size companies with limitedcomplexity Accounting standards are simpleand pragmatic Stability of the standards Limited disclosures requirements National recognition True and fair view principle Targeted companies:international companies of acertain size and complexity Detailed guidance requiringspecific accounting treatment Standards in constant evolution Detailed information required International recognitionIFRSS wiss gaap FERS wiss gaap FER vs.

8 ifrs IFMA presentation 2014 Deloitte AG. All rights HerbetteDirectorAudit & (0)58 279 814613 Swiss gaap FER vs. ifrs IFMA presentation 2014 Deloitte AG. All rights refers to one or more of Deloitte Touche Tohmatsu Limited ( DTTL ), a UK private company limited by guarantee, and its network of member firms,each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of DTTLand its member SA is a subsidiary of Deloitte LLP, the United Kingdom member firm of SA is recognised as auditor by the Federal Audit Oversight Authority and the Swiss Financial Market Supervisory publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out willdepend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any ofthe contents of this publication.

9 Deloitte SA would be pleased to advise readers on how to apply the principles set out in this publication to their specificcircumstances. Deloitte SA accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of anymaterial in this publication. 2014 Deloitte SA. All rights reserved.