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This excerpt taken from the MICC 6-K filed Nov 24, 2006. I. Consolidation of Variable Interest Entities
On March 31, 2004 Millicom adopted Financial Interpretation No. 46, revised 2003 (“FIN 46R”), Consolidation of Variable Interest Entities. FIN 46R applies to legal entities in which a variable interest is held. Such entities are referred to as variable interest entities (“VIEs”). VIEs are those entities possessing certain characteristics, which indicate either a lack of equity investment sufficient to cover the expected losses of the entity or the equity holders’ lack of characteristics consistent with holding a controlling financial interest. When an entity is a VIE the party whose interests absorb a majority of the entity’s expected losses, receives a majority of its expected residual returns, or both, is deemed to be the Primary Beneficiary and must consolidate the VIE.
Information on the Group’s share of revenues and operating expenses of VIEs contributed on a proportional basis under IFRS are included in Note 15 to the interim condensed consolidated financial statements.
This excerpt taken from the MICC 6-K filed Aug 17, 2006. I. Consolidation of Variable Interest Entities On March 31, 2004 Millicom adopted Financial Interpretation No. 46, revised 2003 (“FIN 46R”), Consolidation of Variable Interest Entities. FIN 46R applies to legal entities in which a variable interest is held. Such entities are referred to as variable interest entities (“VIEs”). VIEs are those entities possessing certain characteristics, which indicate either a lack of equity investment sufficient to cover the expected losses of the entity or the equity holders’ lack of characteristics consistent with holding a controlling financial interest. When an entity is a VIE the party whose interests absorb a majority of the entity’s expected losses, receives a majority of its expected residual returns, or both, is deemed to be the Primary Beneficiary and must consolidate the VIE. Information on the Group’s share of revenues and operating expenses of VIEs contributed on a proportional basis under IFRS are included in Note 15 to the interim condensed consolidated financial statements. This excerpt taken from the MICC 6-K filed May 24, 2006. Consolidation of Variable Interest Entities.
FIN 46R applies to legal entities in which a variable interest is held.
Such entities are referred to as variable interest entities (“VIEs”). VIEs are
those entities possessing certain characteristics, which indicate either a lack
of equity investment sufficient to cover the expected losses of the entity or
the equity holders’ lack of characteristics consistent with holding a
controlling financial interest. When an entity is a VIE the party whose
interests absorb a majority of the entity’s expected losses, receives a
majority of its expected residual returns, or both, is deemed to be the Primary
Beneficiary and must consolidate the VIE.
Information on the Group’s share of revenues and operating expenses of VIEs contributed on a proportional basis under IFRS are included in Note 12 to the interim condensed consolidated financial statements.
This excerpt taken from the MICC 20-F filed May 5, 2006. Consolidation of Variable Interest Entities.
FIN 46R applies to legal entities in which a variable interest is held.
Such entities are referred to as variable interest entities (“VIEs”). VIEs are
those entities possessing certain characteristics, which indicate either a lack
of equity investment sufficient to cover the expected losses of the entity or
the equity holders’ lack of characteristics consistent with holding a
controlling financial interest. When an entity is a VIE the party whose
interests absorb a majority of the entity’s expected losses, receives a
majority of its expected residual returns, or both, is deemed to be the Primary
Beneficiary and must consolidate the VIE.
Information on the Group’s share of revenues and operating expenses of VIEs contributed on a proportional basis under IFRS are included in Note 7 to the consolidated financial statements. This excerpt taken from the MICC 20-F filed May 4, 2006. Consolidation of Variable Interest Entities.
FIN 46R applies to legal entities in which a variable interest is held.
Such entities are referred to as variable interest entities (“VIEs”). VIEs are
those entities possessing certain characteristics, which indicate either a lack
of equity investment sufficient to cover the expected losses of the entity or
the equity holders’ lack of characteristics consistent with holding a
controlling financial interest. When an entity is a VIE the party whose
interests absorb a majority of the entity’s expected losses, receives a
majority of its expected residual returns, or both, is deemed to be the Primary
Beneficiary and must consolidate the VIE.
Information on the Group’s share of revenues and operating expenses of VIEs contributed on a proportional basis under IFRS are included in Note 7 to the consolidated financial statements. This excerpt taken from the MICC 20-F filed May 1, 2006. Consolidation of Variable Interest Entities.
FIN 46R applies to legal entities in which a variable interest is held. Such
entities are referred to as variable interest entities (“VIEs”). VIEs are those
entities possessing certain characteristics, which indicate either a lack of
equity investment sufficient to cover the expected losses of the entity or the
equity holders’ lack of characteristics consistent with holding a controlling
financial interest. When an entity is a VIE the party whose interests absorb a
majority of the entity’s expected losses, receives a majority of its expected
residual returns, or both, is deemed to be the Primary Beneficiary and must
consolidate the VIE.
Information on the Group’s share of revenues and operating expenses of VIEs contributed on a proportional basis under IFRS are included in Note 7 to the consolidated financial statements. This excerpt taken from the MICC 6-K filed Nov 29, 2005. Consolidation of Variable
Interest Entities. FIN 46 applies to legal entities in which a
variable interest is held. Such entities are referred to as variable interest
entities (“VIEs”). VIEs are those entities possessing certain characteristics,
that indicate either a lack of equity investment sufficient to cover the
expected losses of the entity or entities whose equity holders lack the power
normally conveyed by holding controlling financial interests. When an entity is
a VIE the party whose interests absorb a majority of the entity’s expected
losses, receives a majority of its expected residual returns, or both, is
deemed to be the Primary Beneficiary and must consolidate the VIE.
Millicom adopted FIN 46 on March 31, 2004 for entities created prior to February 1, 2003, and as a result, began consolidating its interest in the following VIEs: (a) Cam GSM Company Limited (“Cam GSM”), (b) Royal Telecam International Limited (“Telecam”), (c) Millicom Argentina S.A. (sold in September 2004), and (d) Comunicaciones Celulares S.A. (“Comcel”). In addition, on May 26, 2005, the acquisition date of an additional 16.67% interest in Millicom’s operation in Honduras (see Note 3), Millicom started consolidating (e) Telefonica Celular S.A. (“Celtel”) under U.S. GAAP. The VIEs under (a) to (e), collectively, are referred to as the “Joint Ventures Interests”. Under IFRS, the Joint Ventures Interests are proportionally consolidated. The consolidation of Telefonica Celular S.A. (“Celtel”) on May 26, 2005 led to the recognition of an additional preliminary goodwill under U.S. GAAP relating to the minority interests of $18,906,000.
Under International Accounting Standards 27 (IAS 27), revised, This excerpt taken from the MICC 6-K filed Aug 29, 2005. Consolidation of Variable
Interest Entities. FIN 46 applies to legal entities in which a
variable interest is held. Such entities are referred to as variable interest
entities (“VIEs”). VIEs are those entities possessing certain characteristics,
that indicate either a lack of equity investment sufficient to cover the
expected losses of the entity or entities whose equity holders lack the power
normally conveyed by holding controlling financial interests. When an entity is
a VIE the party whose interests absorb a majority of the entity’s expected
losses, receives a majority of its expected residual returns, or both, is
deemed to be the Primary Beneficiary and must consolidate the VIE.
Millicom adopted FIN 46 on March 31, 2004 for entities created prior to February 1, 2003, and as a result, began consolidating its interest in the following VIEs: (i) Cam GSM Company Limited (“Cam GSM”), (ii) Royal Telecam International Limited (“Telecam”), (iii) Millicom Argentina S.A. (sold in September 2004), and (iv) Comunicaciones Celulares S.A. In addition, on May 26, 2005, the acquisition date of an additional 16.67% interest in Millicom’s operation in Honduras (see Note 3), Millicom started consolidating (v) Telefonica Celular S.A. (“Celtel”) under U.S. GAAP. The VIEs under (i) to (v), collectively, are referred to as the “Joint Ventures interests”. Under IFRS, the Joint Ventures interests are proportionally consolidated. The consolidation of Telefonica Celular S.A. (“Celtel”) on May 26, 2005 led to the recognition of an additional goodwill under U.S. GAAP relating to the minority interests of $18,906,000.
In addition, Great Universal Inc. (“GU”) and Modern Holdings (“Modern”), which were consolidated under U.S. GAAP before the adoption date of FIN 46 (see item 14), are variable interest entities, which continue to be consolidated under FIN 46. For IFRS, GU and Modern are not consolidated. The effect of consolidating GU and Modern under U.S. GAAP is an incremental income of $1,917,000 for the six month period ended June 30, 2005 (June 30, 2004: $1,536,000).The adoption of FIN 46 did not lead to the deconsolidation of any interests previously consolidated under U.S. GAAP.
The effect of consolidating the above mentioned VIE’s is reflected in the U.S. GAAP reconciliation of the balance sheet and statement of profit and loss, which are presented on the following pages. Information on the Group’s share of revenues and expenses contributed on a proportional basis under IFRS are included in Note 13 to the interim condensed consolidated financial statements. The cumulative impact of adopting FIN 46 as of March 31, 2004 was $2,865,000 including $2,832,000 relating to the discontinued operation Millicom Argentina S.A. and has been recorded as a cumulative effect of change in accounting principle as of June 30, 2004.
Millicom’s interests in joint ventures not consolidated under FIN46 and adjusted from proportional consolidation under IFRS to equity method under U.S. GAAP (Emtel Limited and Celtel prior to May 26, 2005), is also reflected in the balance sheet and profit and loss reconciliations on the following pages.
2. Prior to the adoption date of FIN 46 on March 31, 2004, as it relates to entities created prior to February 1, 2003 Millicom’s interests in joint ventures were accounted for using the equity method under U.S. GAAP. Summarized below are the adjustments to the profit and loss account that are required under U.S. GAAP for the reversal of additional losses recorded by Millicom above those recorded for IFRS due to Millicom’s commitment to provide further financial support to the joint ventures. These additional losses are reversed to the extent of net income subsequently reported by the joint ventures.
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3. Under IFRS, Millicom started reconsolidating its operation in El Salvador (“Telemovil”) in September 2003 after the dispute with the minority shareholders was resolved. Upon consolidation, in September 2003, under U.S. GAAP, Millicom reclassified an amount of $19,605,000 from the carrying amount of its investment in Telemovil to goodwill, corresponding to the remaining difference between the investment’s cost and the underlying equity in net assets of Telemovil at the date of investments in Telemovil. Under IFRS, prior to the consolidation in September 2003, Telemovil was recorded as an available-for-sale investment and therefore no reclassification to goodwill was recorded.
4. The value of cellular properties contributed by the shareholders of certain of the Company’s subsidiaries and joint ventures, upon formation of Millicom, were not recorded at the contributing shareholders’ carryover basis under IFRS. Rather, the value of such properties was stepped-up to reflect their fair value. The incremental value recorded for these properties was recorded as an intangible asset, attributable to licenses, for $58,628,000. Following the adoption of International Accounting Standard 38 (IAS 38), | EXCERPTS ON THIS PAGE:
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