2 Summary of significant accounting policies

Initial application of the new Law on Financial Statement Reporting

The annual financial statements for 2015 were prepared for the first time pursuant to the provisions of the Federal Law on Financial Statement Reporting (32nd section of the Federal Code of Obligations; German: Obligationenrecht). In order to ensure comparability, the prior year’s amounts were restated to conform to the new classification standards.

This concerns in particular the following captions:

  • Receivables were divided into trade accounts receivables and other short-term receivables. Receivables from third parties and those due from Group companies are included in these positions.
  • Accrued income and deferred expense were previously included in other assets. They are now disclosed separately.
  • Loans to third parties and to Group companies are disclosed jointly in the caption financial assets.
  • Trade payables now include also trade payables to Group companies.
  • Current financial liabilities are now reported under short-term interest-bearing liabilities. Derivatives were reclassified from financial liabilities to other short-term liabilities.
  • Other liabilities were reclassified to the captions other short-term liabilities, accrued expenses and deferred income and short-term provisions.
  • Accrued expense and deferred income were previously not reported separately, but included in other liabilities.
  • Non-current financial liabilities are now shown under long-term interest-bearing liabilities. Derivatives were reclassified from financial liabilities to other long-term liabilities.
  • Legal reserves were previously included in the caption retained earnings and are now disclosed separately.

Financial statement reporting policies


Significant financial statement reporting policies which are not prescribed by law are described below. The ability to create and release hidden reserves for the purpose of ensuring the sustainable development of the company should be taken into account in this respect.

Shareholdings and recording of dividend distributions by subsidiary companies

Investments are accounted for at acquisition cost less valuation allowances, as required. Dividend distributions from subsidiary companies are accrued in the financial statements of Swisscom Ltd provided that the annual general meetings of the subsidiary companies approve the payment of a dividend prior to the approval of the Annual Financial Statements of Swisscom Ltd by the Board of Directors.

Treasury shares

At the time of acquisition, treasury shares are recorded at purchase cost as a reduction of shareholders’ equity. In the event of a subsequent disposal, the resultant gain or loss is taken to income as financial income or financial loss, respectively. The balance of and transactions in treasury shares are disclosed in Note 31 to the Consolidated Financial Statements.

Share-based payments

Should treasury shares be used for share-based payments to members of the Board of Directors and employees, the difference between the acquisition cost and any respective payment to the employees represents personnel expense as at the time the shares are allocated. Share-based payments of Swisscom Ltd are detailed in Note 11 to the Consolidated Financial Statements.

Derivative financial instruments and hedge accounting

Derivative financial instruments which are deployed to hedge foreign currencies and interest rates, are measured at market price. Movements in market prices are recorded in the income statement. Derivatives which meet the conditions of a hedging transaction, are measured using the same valuation principles as those which apply to the underlying transaction. Gains and losses arising from the underlying and hedging transactions are dealt with on a joint basis (combined valuation perspective with regard to valuation units).