2. BASIS OF PREPARATION AND
OTHER SIGNIFICANT ACCOUNTING POLICIES
2.1 Significant accounting policies
The consolidated semi-annual financial statements of the Züblin Group have been prepared in accordance with IAS 34 “Interim Financial Reporting” and with Art. 17 of the SIX Swiss Exchange Directive on Financial Reporting. The consolidated semi-annual financial statements do not contain all of the information and notes that are required at the financial year-end and should therefore be read along with the consolidated annual financial statements for the Züblin Group for the financial year ending 31 March 2019.
The consolidated semi-annual financial statements for the Züblin Group as of 30 September 2019 were approved by the Board of Directors on 5 November 2019.
2.2 Amendments to accounting principles
2.2.1 Amendments implemented in the current financial year
The same accounting and valuation principles as for the consolidated annual financial statements as of 31 March 2018 apply to the presented consolidated semi-annual financial statements.
Since 1 April 2018 the following standards and interpretations have to be applied:
None of the above amendments, interpretations and improvements had any material impact on the consolidated semi-annual financial statements.
IFRS 16 regulates the recognition, measurement and presentation of leases and replaces the existing guidelines in IAS 17. The standard is effective from 1 January 2019. IFRS 16 provides that leases that were previously recognised as operating leases in the income statement must now also be recognised in the balance sheet. IFRS 16 does not have any significant accounting effect for Züblin as lessor. Due to the effects of the standard on the accounting of lessees, changes in the needs and behaviour of tenants could occur which could possibly have an impact on Züblin's business model.
2.2.2 Future amendments to accounting policies
Some new or amended IFRS standards and interpretations have been adopted by the IASB, but will only enter into force in a subsequent accounting period. It is not anticipated that these new or amended standards and interpretations will have any material impact on the financial reporting of the Züblin Group. A systematic analysis will be performed later on.
2.3 Critical accounting estimates and judgements
The preparation of the consolidated semi-annual financial statements requires the use of estimates and judgements by the Company’s management. These estimates and judgements affect the way in which assets, liabilities, income and expenses are reported and their valuation, as well as the disclosure of contingent liabilities and other disclosures in the semi-annual financial statements. The actual outturn may differ from assumptions and estimates that have been used. In the event that they subsequently differ from the actual outturn, the initial estimates and assumptions are revised to reflect the changed circumstances during the financial year in which these changes occur.
In the Züblin Group the main accounting estimates and judgements relate to the valuation of investment property and income taxes. The disclosures of critical accounting estimates and judgements as presented in the annual consolidated financial statements are unchanged. There were no changes in the valuation criteria in connection with IFRS 13 during the reporting period and there were no reclassifications within this category. The investment properties recognized at fair value as of 30 September 2019 qualify unchanged to 31 March 2019 as level 3 fair value inputs.
2.4 Consolidation principles
2.4.1 Scope of consolidation
In the first half year 2019/20, the entire 29% stake (17.3% on a diluted basis) was sold by exercising the call option granted in 2015 to the buyer of the French subsidiary Züblin Immobilière France SA (now: Officiis Properties SA). The company was deconsolidated as early as 2015. The sale had no effect on the consolidated result.