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In its interim financial statements 2012 Publigroupe Ltd failed to disclose in sufficient detail the offsetting of goodwill from associates against equity as well as its accounting treatment of associates. As a result the Sanction Commission imposed a fine in the amount of CHF 40,000 on the company.
Publigroupe Ltd is listed in the Domestic Standard at SIX Swiss Exchange. In its interim financial statements 2012 the company violated the requirements of para. 5 of Swiss GAAP FER 12 "Interim Reporting" due to the deficient level of disclosure regarding the offsetting of goodwill from associates against equity as well as the accounting treatment of associates.
The disclosures did not describe the reasons why goodwill from the acquisition of consolidated entities in the amount of CHF 134.1 million was presented separately, while goodwill from acquisitions by associates in the amount of CHF 74.5 million was offset against "Retained profits". The description of the impact of a theoretical capitalisation of goodwill including depreciation and a potential impairment was disclosed only for goodwill from consolidated entities in the amount of CHF 134.1 million. The disclosures of Publigroupe Ltd did not provide sufficient information about the presentation of associates as a long-term liability in the balance sheet. Even though the disclosures were in part verbally and quantitatively deficient, Publigroupe Ltd did not present a misleading picture; the key ratios published were justifiable.
The violation of the requirements of Swiss GAAP FER 12/5 also represents a violation of the Listing Rules (Art. 51 LR). The Sanction Commission considers this violation and the degree of fault to be minor. As a result a fine in the amount of CHF 40,000 was imposed on Publigroupe Ltd.
With regards to the violation of IAS 18 "Revenue" in the annual financial statements 2011, which was also alleged by SIX Exchange Regulation, the Sanction Commission did not issue a sanction due to the fact that the error was corrected and disclosed in the subsequent interim financial statements 2012.
Appendix regarding the accounting standards
Periodic financial reporting is part of the information required to ensure a functioning market.
Information regarding financial reporting can be found at:
http://www.six-exchange-regulation.com/obligations/financial_reporting_en.html
Swiss GAAP FER 12 "Interim Reporting"
With regards to interim reporting Swiss GAAP FER 12/5 requires that disclosures are provided in a way
that enables investors to form a well-founded opinion of the development of the activities and the course
of business of an organisation during the reporting period. Specifically, any changes in the accounting
principles must be described and the resulting significant effects of such a change need to be disclosed
(i.e. due to a conversion from IFRS to Swiss GAAP FER). Additionally, any other factors, which significantly
impact the financial position, the cash flows and the results of operations during the reporting period,
must be described.
