2011 Annual Report - Italcementi Group

1.2. Accounting policies and basis of presentation
The accounts adopt the cost principle, with the exception of derivatives and financial assets held for trading or
for sale, which are stated at fair value. The carrying amounts of hedged assets and liabilities are adjusted to
reflect changes in fair value on the basis of the hedged risks. The financial statements are presented in euro.
All amounts in the accounting schedules and in the notes are rounded to thousands of euro, unless otherwise
specified.
The basis of presentation of the financial statements is as follows:
current and non-current assets and current and non-current liabilities are presented as separate
classifications on the face of the statement of financial position. Current assets, which include cash and
cash equivalents, are assets that the company intends to realize, sell or consume during its normal
business cycle; current liabilities are liabilities that the company expects to settle during the normal
business cycle or in the twelve months after the end of the reporting period;
on the income statement, costs are analyzed by the nature of the expense;
on the statement of cash flows, the indirect method is used.
Since the Italcementi Group applies IAS 34 “Interim Financial Reporting” to its half-year reports, with the
consequent identification of a six-month interim period, any reductions in value are recorded at closure of the
half year.
1.3. Use of estimates
The preparation of the separate financial statements and the notes in conformity with the international financial
reporting standards requires management to make estimates that affect the carrying amounts of assets,
liabilities, income and expense, such as amortization, depreciation and provisions, and the disclosures on
contingent assets and liabilities in the notes. Since these estimates are determined on a going-concern basis,
using the information available at the time, they could diverge from the actual future results. This is particularly
evident in the present financial and economic crisis, which could generate situations diverging from those
estimated today and require currently unforeseeable adjustments, including adjustments of a material nature,
to the carrying amounts of the items in question. Assumptions and estimates are particularly sensitive with
regard to measurement of non-current assets, which depend on forecasts of future results and cash flows,
provisions for disputes and restructurings and commitments in respect of pension plans and other long-term
benefits. Management conducts regular reviews of assumptions and estimates, and immediately recognizes
any adjustments in the financial statements.
1.4. General policies
Subsidiaries and associates
Subsidiaries are companies in which the company has the power to determine, directly or indirectly,
administrative and management decisions and to obtain the benefits thereof. Generally speaking, control is
assumed to exist when the company holds, directly or indirectly, more than one half of voting rights, including
potential voting rights deriving from convertible securities. Associates are companies in which the company
has significant influence over administrative and management decisions even though it does not hold control.
Generally speaking, significant influence is assumed to exist when the company holds, directly or indirectly, at
least 20% of voting rights or, even if it holds a lower percentage of voting rights, when it is entitled to take part
in financial and management policy decisions by virtue of a specific juridical status including, but not limited to,
participation in voting trusts or other forms of material exercise of rights of governance.
Investments in subsidiaries and associates are measured using the cost method, whereby they are recognized
initially at cost, and subsequently adjusted to reflect changes in amount whenever, following impairment
testing, conditions are found such as to make it necessary to adjust the carrying amount to the effective value
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