The recent adaptations of the IFRS accounting standard, applicable as of 2013, would lead for Georg Fischer to significant distortions of its financial figures, in particular regarding the con-solidation of one of its largest companies. The Board of Directors of Georg Fischer has therefore decided to change the accounting standard from IFRS to Swiss GAAP FER starting with the 2013 accounts. This decision will ensure that the company continues to give a precise picture of its financial situation.
The following reasons triggered the decision to change the company’s accounting standard from IFRS (International Financial Reporting Standards) to Swiss GAAP FER (Generally Accepted Accounting Principles / FER=Fachempfehlungen zur Rechnungslegung):
The Chinaust group, a 50/50 joint venture of GF Piping Systems in China, is with approximately CHF 400 million of turnover one of the largest entities of Georg Fischer today. Its disclosure as equity investment according to the new IFRS 11 accounting standard would no longer give an accurate picture of Georg Fischer in China. Under Swiss GAAP FER, Georg Fischer will continue to consolidate the 50 percent share of Chinaust in its balance sheet and income statement. This better reflects the economic reality of Georg Fischer.
Furthermore, the new IAS 19 revised standard calls for the inclusion of the over- or underfunding of pension funds in a company’s equity. Swiss pension funds, however, are basically independent, and their performance is not linked to a company’s success. Adding or subtracting their under- or overcoverage would lead to considerable volatility in the equity of Georg Fischer. Under Swiss GAAP FER, those fluctuations are to a large extent eliminated.
Following the switch to Swiss GAAP FER, the goodwill will be offset against equity, which will result per end of 2012 in a still solid equity ratio in the range of 35 percent.
Georg Fischer will continue to offer its investors transparent and detailed financial figures including segment information and ensure a true and fair view of its financial situation to the investor community. The shares of Georg Fischer will continue to be part of the SMIM and the SPI indices of the SIX Swiss Exchange.
