ArcelorMittal South Africa 2007 Annual Report Page 76 Notes to the group and company annual financial statements continued for the year ended 31 December 2007 IFRS 3 (Revised) and IAS 27 (Revised) with consequential changes to IAS 28 (Revised) and IAS 31 (Revised): •  place greater emphasis on the use of fair value; •  focus on changes in control as a significant economic event, introducing requirements to re-measure ownership interests to fair value at the time when control is achieved or lost, and recognising directly in equity the impact of all transactions between controlling and non-controlling (previously known as minority) shareholders not involving a loss of control; and •  focus on what is given to the seller as consideration, rather than what is spent to achieve the acquisition. Transaction costs, changes in the value of contingent consideration, settlement of pre-existing contracts, share-based payments and similar items will generally be accounted for separately from business combinations and will generally affect profit or loss. The standard is not expected to have an impact on the group’s and company’s financial results or disclosures. 2.4 Authoritative guidance and circulars issued by the South African Institute of Chartered Accountants In compliance with the JSE Listings Requirements the following authoritative guidance issued by the South African Institute of Chartered Accountants (SAICA) in 2007, was considered: •  CC 08/07, Headline Earnings (effective for interim or annual periods ending on or after 31 August 2007). 2.5 Restatements and reclassifications 2.5.1 Restatement IFRS 3, Business Combinations and IAS 16, Property, plant and equipment As part of the group’s continuous accounting improvements process, the current year’s reversal (as described completely in note 9) of the: (a)   remaining impairment of R2 799 million against the investment in Saldanha Steel (Proprietary) Limited in the entity-own accounts of ArcelorMittal South Africa Limited, and (b)   the remaining impairment of R489 million against the property, plant and equipment in the entity-own accounts of Saldanha Steel (Proprietary) Limited, enabled the group to re-assess the accounting treatment of Saldanha Steel (Proprietary) Limited following it becoming a subsidiary in the 2002 financial year. Specific focus was given to the accounting treatment of property, plant and equipment. The originating impairment charge of R3 000 million against the property, plant and equipment in the entity-own accounts of Saldanha Steel (Proprietary) Limited was reversed between 2002 to 2004, with the final reversal being recognised in the current financial year. When the impairment originated, Saldanha Steel (Proprietary) Limited was a jointly controlled entity. Consequently, only R1 500 million of the originating charge was recognised in the group’s consolidated retained earnings. With subsequent reversals of the impairment charge, only 50% could be recognised by the group, with the remainder being eliminated on consolidation. Given that ArcelorMittal South Africa’s piecemeal acquisition of Saldanha Steel (Proprietary) Limited straddled the originating impairment, the application of purchase accounting resulted in the gross carrying amount of the assets in the subsidiary exceeding that from a group perspective. As the underlying assets are depreciated over time, it is necessary for the remaining R1 500 million to be unwound on consolidation in order to avoid a duplicate reduction in the net carrying amount of the property, plant and equipment from a group perspective. For the group the impact at the beginning of the comparative period is the recognition of: •  a decrease in accumulated depreciation of R377 million; •  an increase in the deferred tax liability of R110 million;   •  an increase in retained earnings of R267 million; and •  an increase in earnings per share and headline earnings per share of 60 cents per share.