3.1 Changes in accounting policies
Hannover Re corrected the balance sheet recognition of certain life reinsurance contracts. In accordance with applicable US GAAP (FASB ASC 340-30), technical assets and liabilities relating to these contracts are to be offset in the balance sheet. These offsetting rules were not applied consistently within the Group in previous reporting periods. In accordance with the requirements of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, we therefore adjusted the comparative figures in the present financial statement. The adjustments had no implications for Group net income or shareholders‘ equity in any of the previous reporting periods. Relative to the figures originally shown, the balance sheet items “funds withheld” (assets side) and “contract deposits” (liabilities side) are each reduced by EUR 1,429.2 million as at 31 December 2009. The decrease in these balance sheet items in the opening balance sheet as at 1 January 2009 amounted to EUR 1,852.1 million in each case.
In addition, pursuant to the requirements of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” it was necessary to correct the translation of intangible assets held in foreign currencies in the consolidated annual financial statement as at 31 December 2009.
The effects of the aforementioned adjustments on the items of the consolidated balance sheet and consolidated statement of income are as follows:
| Adjustments to the consolidated balance sheet pursuant to IAS 8 in EUR thousand | 1.1.2009 | 31.12.2009 |
|---|---|---|
| Funds withheld | (1,852,064) | (1,429,178) |
| Other assets | - | +2,527 |
| Total change in assets | (1,852,064) | (1,426,651) |
| Contract deposits | (1,852,064) | (1,429,178) |
| Retained earnings | - | +2,527 |
| Total change in liabilities | (1,852,064) | (1,426,651) |
| Adjustments to the consolidated statement of income pursuant to IAS 8 in EUR thousand | 1.1.- 31.12.2009 |
|---|---|
| Other income and expenses | +2,527 |
| total change in items of the statement of income | +2,527 |
| Change in basic and diluted earnings per share (in EUR) | +0.02 |