Notes to the consolidated financial statements

Information to the report

This section explains the basis for the preparation of the consolidated financial statements and provides a summary of the main general accounting principles as well as management assumptions and estimates.

About this report

The consolidated financial statements of Georg Fischer Ltd (“GF”) have been prepared in accordance with all of the current guidelines of Swiss GAAP FER (Swiss Generally Accepted Accounting Principles Accounting and Reporting Recommendations) and, furthermore, with the provisions of the Listing Rules of SIX Swiss Exchange and with Swiss company law. The consolidated financial statements are based on the financial statements of the GF Corporate Companies for the year ended 31 December, prepared in accordance with uniform corporate accounting principles.

Accounting policies 

The consolidated financial statements have been prepared in accordance with the historical cost method with the exception of marketable securities, participations under 20%, and derivative financial instruments, which are measured at fair value. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, and contingent liabilities at the balance sheet date. If in the future such estimates and assumptions, which are based on management’s best judgment at the balance sheet date, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.

Changes in accounting principles

In the year under review the Swiss GAAP FER accounting principles remained unchanged.

Scope and principles of consolidation

The scope of consolidation includes GF and all GF Corporate Companies which GF controls directly or indirectly by either holding more than 50% of the voting rights or by otherwise having the power to control their operating and financial policies (with GF and these GF Corporate Companies also referred to as the Corporation). These GF Corporate Companies are fully consolidated; assets, liabilities, income, and expenses are incorporated in the consolidated financial statements. Intercompany balances and transactions are eliminated upon consolidation. Non-controlling interests are presented as a component of consolidated equity in the consolidated balance sheet and consolidated net income in the consolidated income statement. Gains arising from intercompany transactions are eliminated in full. Capital consolidation is based on the purchase method, whereby the acquisition cost of a GF Corporate Company is eliminated at the time of acquisition against the fair value of net assets acquired with the remainder recorded as goodwill that is subsequently offset within equity of the Corporation.

Joint ventures in which the GF Corporation exercises joint control together with a joint venture partner are proportionately consolidated.

Companies in which GF has a non-controlling interest of at least 20% but less than 50%, or over which it otherwise has significant influence, are accounted for using the equity method and included in the consolidated financial statements as investments in associates. Investments with less than 20% voting rights are accounted for at fair value and presented under other financial assets.

Foreign currencies

GF Corporate Companies prepare their financial statements in their functional currency. Assets and liabilities held in other currencies are translated at the spot rate on the balance sheet date. Foreign exchange gains and losses resulting from transactions and from the conversion of balance sheet items into the functional currency are reported in the income statement.

The consolidated financial statements are prepared and presented in Swiss francs. For consolidation purposes, the financial statements of the GF Corporate Companies that report in another currency than Swiss francs are translated into Swiss francs as follows: balance sheets at year-end rates, income and cash flow statements at average rates for the year under review. Any translation differences resulting from the different translation of the balance sheets and income statements or from the translation of corporate loans with equity character denominated in foreign currencies are recognized in equity, including deferred tax. Upon the divestment of a foreign GF Corporate Company, the related cumulative exchange differences are recycled to the income statement.

Other evaluation principles

Other relevant valuation principles, if relevant for the understanding of the valuation of the respective asset or liability, are reflected in the notes. 

Management assumptions and estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions that could materially affect the financial position of the Corporation. The management of GF has identified following assumptions and estimates to be of special relevance to the presentation of the consolidated financial statements:

Management assumptions and estimates



Income taxes



Impairment of non-current assets



Impairment of intangible assets



Provisions for warranties and onerous contracts



Key figures not defined by Swiss GAAP FER

The subtotal “Gross value added” includes all operating income less cost of materials and products, changes in inventory, and operating expenses. As the subtotal “Gross value added” is an important key figure to GF, it is reported separately in the income statement.

The EBITDA corresponds to the operating result (EBIT) before depreciation on tangible fixed assets and amortization on intangible assets. For GF, the EBITDA is an important operational key figure, which, on the one hand, displays a harmonization to the cash flow from operating activities, and, on the other hand, is used as a reference for multiples.

“Free cash flow” consists of cash flow from operating activities together with cash flow from investing activities and is reported separately in the cash flow statement. “Free cash flow” is not only an important performance indicator for GF but is also a generally accepted and widely used performance figure in the financial sector.