2011 Annual Report - Italcementi Group

2011 Annual Report
Presentation 4
General information 15
Annual Report Consolidated Annual Report Directors’ report 28
Extraordinary session Italcementi S.p.A. Annual Report Consolidated financial statements 63
1.4 Business combinations
On first-time adoption of the IFRS, as allowed by IFRS 1, the Group elected not to apply IFRS 3 retrospectively
to business combinations that took place before January 1, 2004.
Until December 31, 2009, business combinations were accounted for with the purchase method in IFRS 3.
Since January 1, 2010, business combinations have been accounted for with the acquisition method in IFRS3
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 amount 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).
Business combinations achieved in stages
When a business combination is achieved in stages, through a series of share purchases, for each transaction
the fair value of the previously held interest is re-determined and any gain or loss is taken to the income
statement.
Changes in equity interests in subsidiaries
Acquisitions of additional shares after acquisition of control do not require re-determination of identifiable asset
and liability amounts. The difference between the cost and the acquired equity interest is recognized as equity
attributable to owners of the parent. Transactions that reduce the percentage interest held without loss of
control are treated as sales to non-controlling interests and the difference between the interest sold and the
price paid is recognized in equity attributable to owners of the parent.
Purchase commitments on non-controlling interests
A put option granted to non-controlling interests of a company controlled by the Group is initially recognized by
recording the acquisition amount as a liability, since the amount in question is the present value of the put
option exercise price.
The complementary acquisition of non-controlling interests with put options is in the financial statements:
the non-controlling interests are reclassified under liabilities and the difference between the fair value of the
purchase commitment liabilities and the carrying amount of the non-controlling interests is recognized under
equity attributable to owners of the parent;
subsequent changes in liabilities are recognized under equity attributable to owners of the parent with the
exception of adjustments to the present value, which are taken to the income statement.
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