Accounting Policies  (including key accounting estimates and assumptions) Statement of Compliance The Consolidated Financial Statements of CRH plc have been prepared in  accordance with International Financial Reporting Standards (IFRS) as adopted  by the European Union, which comprise standards and interpretations approved  by the International Accounting Standards Board (IASB). IFRS as adopted by the  European Union differ in certain respects from IFRS as issued by the IASB.  However, the Consolidated Financial Statements for the financial years presented  would be no different had IFRS as issued by the IASB been applied. References  to IFRS hereafter should be construed as references to IFRS as adopted by the  European Union. With the application of the new standard, the Group’s investments in joint  ventures will be accounted for using the equity method of accounting. The  change to equity accounting will have no impact on the Group’s profit after tax,  but will impact each line item in the Consolidated Income Statement. The impact  of IFRS 11 on the current period (which will be the comparative period as of 31  December 2013) will be to increase the Group’s share of equity-accounted  investments (which currently only include the results of our associate investments)  by €28 million, decrease revenue by €575 million and operating profit by €40  million, and reduce finance costs and income tax expense by €2 million and €10  million respectively. The Group’s Consolidated Balance Sheet will also be impacted on a line by line  basis. The Group’s investments accounted for using the equity method will  increase by €587 million. The Group’s non-current assets will decrease by €71  million and non-current liabilities will decrease by €165 million. The impact on  current assets and current liabilities will be a reduction of €191 million and €97  million respectively. CRH plc, the Parent Company, is a publicly traded limited company incorporated  and domiciled in the Republic of Ireland. The Consolidated Financial Statements, which are presented in euro millions,  have been prepared under the historical cost convention as modified by the  measurement at fair value of share-based payments, retirement benefit  obligations and certain financial assets and liabilities including derivative financial  instruments.  The accounting policies set out below have been applied consistently by all the  Group’s subsidiaries, joint ventures and associates to all periods presented in  these Consolidated Financial Statements.  Certain prior year disclosures have been amended to conform to current year  presentation. IFRS 12 includes all of the disclosures that were previously in IAS 27 related to  consolidated financial statements, as well as all of the disclosures that were  previously included in IAS 31 and IAS 28. These disclosures relate to an entity’s  interests in subsidiaries, joint arrangements, associates and structured entities. A  number of new disclosures are also required. IFRS 12 has no impact on the  Group’s financial performance.  IFRIC 20 provides guidance on the accounting treatment for stripping costs  incurred during the production phase of a surface mine used to extract mineral  resources. The Group currently expenses all stripping costs as incurred. Under  IFRIC 20 the Group is required to capitalise (as a non-current asset) any current  period stripping costs that provide economic benefits beyond the current period.  This would result in a reduction in operating expenses which would be offset by  an increased depletion charge. IFRIC 20 will not have a material impact on the  Group’s financial position or performance. In accordance with Section 148(8) of the Companies Act, 1963 and Section 71  (A) of the Companies (Amendment) Act, 1986, the Company is availing of the  exemption from presenting its individual profit and loss account to the Annual  General Meeting and from filing it with the Registrar of Companies. The Group has adopted the following new and revised IFRS in respect of the  2012 year-end: The application of the above standards and interpretations did not result in  material changes in the Group’s Consolidated Financial Statements. A number of new standards and amendments to standards and interpretations  are effective for annual periods beginning after 1 January 2013, and have not  been applied in preparing these Consolidated Financial Statements as they are  not yet effective for the Group. The Group will adopt these standards from 1  January 2013. IFRS 10 builds on existing principles by identifying the concept of control as the  determining factor in whether an entity should be included within the Consolidated  Financial Statements of the Group. Based on the preliminary analyses performed,  IFRS 10 is not expected to have a material impact on the currently held  investments of the Group.  IFRS 11 replaces IAS 31  Interests in Joint Ventures . The Group currently uses  proportionate consolidation to account for its joint ventures. The Group has  performed an assessment of IFRS 11 and has concluded that our principal joint  arrangements are joint ventures as defined under IFRS 11. The amendments to IAS 1 changes the grouping of items presented in Other  Comprehensive Income. The amendments affect presentation only and have no  impact on the Group’s financial performance.  The most significant change is in how net interest expense will be calculated.  Currently the Group’s Consolidated Income Statement includes a credit for the  expected return on assets and an interest expense in respect of the pension  liability. Under the revised standard the Group will no longer take a credit for the  expected return on assets and the net interest expense will be calculated by  multiplying the year-end discount rate by the year-end net pension liability. Under  this method the 2013 interest expense will be approximately €21 million (2012:  increase in interest expense recorded of approximately €18 million). The other  amendments to IAS 19 are anticipated to have a less significant impact on the  Group and primarily affect the Group’s Swiss retirement benefit obligations.  Additional disclosure requirements relating to the sensitivity of the defined benefit  obligation to changes in each significant actuarial assumptions will also be  required. The application of the revised standard will result in a number of amendments to  the Group’s current accounting for retirement benefit obligations, including a  change to the calculation of the net interest expense in the Consolidated Income  Statement, adjustments to the current service cost for risk sharing between  employer and employees and the adoption of generational-based mortality  tables across all schemes. 76 CRH Basis of Preparation Adoption of IFRS and International Financial Reporting Interpretations  Committee (IFRIC) interpretations (i) IFRS and IFRIC interpretations adopted during the financial year – IAS 12  Income Taxes (amendment)  – IFRS 7  Financial Instruments: Disclosures (amendment) (ii) IFRS and IFRIC interpretations being adopted in 2013 – IFRS 10  Consolidated Financial Statements *  – IFRS 11  Joint Arrangements *, IAS 28  Investments in Associates and Joint  Ventures – IFRS 7  Financial Instruments: Disclosures - amendments – IAS 1  Presentation of Financial Statements - amendments  – IAS 19  Employee Benefits (revised)  – IFRIC 20  Stripping Costs in the Production Phase of a Surface Mine – IFRS 12  Disclosure of Interests in Other Entities *  *  CRH prepares its Consolidated Financial Statements in compliance with IFRS as issued by the EU and prepares its form 20-F in compliance with IFRS as issued by the IASB. IFRS  10, 11 and 12 have an effective date of 1 January 2014 for IFRS as issued by the EU. The IASB has an effective date for these standards of 1 January 2013. To ensure consistency  between the 2013 Annual Report and form 20-F, CRH will early adopt IFRS 10, 11 and 12 in 2013.