2012 Annual Report - Italcementi Group

Since January 1, 2010, business combinations have been accounted for with the acquisition method in IFRS 3
revised.
Cost of business combinations
Under IFRS 3 revised, acquisition cost is the sum of the acquisition-date fair value of the contingent
consideration and the amount of any non-controlling interests in the acquired entity. For each business
combination, any non-controlling interests in the acquired entity must be measured at fair value or in proportion
to their interest in the identifiable net assets of the acquired entity.
IFRS 3 revised provides that costs relating to the acquisition be expensed in the periods in which they are
incurred and the services are received.
Allocation of the cost of business combinations
Goodwill is measured as the positive difference between:
the aggregate of the consideration transferred, the amount of any non-controlling interests in the acquired
entity, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquired entity, with
respect to
the net value of identifiable assets acquired and liabilities assumed at the acquisition date.
If the difference is negative, it is recognized in the income statement.
If on initial recognition the acquisition cost of a business combination can only be determined provisionally, the
allocated amounts are adjusted within twelve months of the acquisition date (measurement period).
1.6. Translation of foreign currency items
Foreign currency transactions
Foreign currency transactions are initially translated into the functional currency using the exchange rate at the
transaction date. At the end of the reporting period, foreign currency monetary assets and liabilities are
translated into the functional currency at the closing rate. Exchange rate gains and losses are taken to the
income statement.
Non-monetary foreign currency assets and liabilities valued at cost are translated at the exchange rate ruling at
the transaction date; those measured at fair value are translated with the exchange rate at the date fair value
was determined.
1.7. Property, plant and equipment
Recognition and measurement
Property, plant and equipment are recognized at cost, less accumulated depreciation and impairment losses.
Cost includes the purchase or production cost and the directly attributable costs of bringing the asset to the
location and the conditions required for its operation. Production cost includes the cost of materials and direct
labor costs. Finance costs relating to the purchase, construction and production of qualifying assets are
capitalized. The carrying amount of some assets existing at the IFRS first-time adoption date of January 1,
2004 reflects revaluations applied in prior years in connection with specific local laws, based on the real
economic value of the assets in question. Assets acquired through business combinations are stated at fair
value, determined on a provisional basis at the acquisition date and subsequently adjusted within the following
twelve months.
Subsequent to initial recognition, property, plant and equipment are carried at cost and depreciated over the
asset’s useful life, less any impairment losses.
Assets under construction are recognized at cost; depreciation begins when the assets enter useful life.
When an asset consists of components with a significant cost and different useful lives, initial recognition and
subsequent measurement are carried out separately for each component.
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