2011 Annual Report - Italcementi Group

Associates
Associates are companies in which the Group 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 Group 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 associates are measured using the equity method, whereby
they are recognized initially at cost, and subsequently adjusted to reflect changes in the Group’s interest in the
associate’s equity. The Group’s share of an associate’s profit or loss is recognized in a specific income
statement line item from the date at which the Group exerts significant influence until it relinquishes such
influence.
Joint ventures
Joint ventures are companies whose business operations are controlled by the Group jointly with one or more
other parties, under contractual arrangements. Joint control presupposes that strategic, financial and
management decisions are taken with the unanimous consent of the parties that control the venture.
Interests in joint ventures are consolidated on a proportionate basis, whereby assets, liabilities, income and
expense are recognized proportionately to the Group’s interest.
The equity and income of joint ventures are consolidated from the date on which joint control is assumed and
until such control is relinquished.
Transactions eliminated during consolidation
All intragroup balances and transactions, including any unrealized gains in respect of third parties, are
eliminated. Unrealized losses deriving from intragroup transactions are eliminated, except in cases where it will
not subsequently be possible to recover such losses.
Unrealized gains deriving from transactions with associates are eliminated against the equity investment
carrying amount, while losses are eliminated proportionately to the Group’s interest, unless it will not
subsequently be possible to recover such losses.
Scope of consolidation
A list of the companies consolidated on a line-by-line basis, on a proportionate basis and with the equity
method is provided in the annex to these notes.
Non-current assets held for sale and discontinued operations
Assets and liabilities held for sale and discontinued operations are classified as such when their carrying
amount will be recovered chiefly through sale rather than through continuing use; such operations must be an
important autonomous business operation or geographical area of operation.
The conditions indicated are deemed to exist when the sale is considered highly likely and the assets and
liabilities are immediately available for sale in their current condition.
Available-for-sale assets are recognized at the lower of net carrying amount and fair value less costs to sell.
Once property, plant and equipment and intangible assets have been classified as available-for-sale, no further
amortization and depreciation may be applied.
In the consolidated income statement, profit (loss) relating to discontinued operations, together with profit or
loss from fair value measurement net of costs to sell and the profit or loss arising from the sale of the
operation, are reflected in a single item separately from profit (loss) relating to continuing operations.
Cash flows relating to discontinued operations are shown separately in the statement of cash flows.
A similar disclosure is also presented for the comparative period.
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