TAV IT

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TAV Airports Holding Annual Report 2008
TAV AIRPORTS HOLDING AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2008
(Amounts expressed in Euro unless otherwise stated)
iv) Transactions eliminated on consolidation:
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with jointly controlled
entities are eliminated to the extent of the Group’s interest in the joint venture. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
v) Business combinations for independent third party purchases:
Acquisitions from third parties are accounted for using the purchase method. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued
by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s
identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their
fair values at the acquisition date.
b) Foreign currency
i) Foreign currency transactions:
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated
to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments
during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Nonmonetary
assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation
are recognised in profit or loss, except for differences arising on qualifying cash flow hedges, which are recognised directly in equity.
ii) Foreign operations:
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated
to Euro at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Euro at exchange
rates at the dates of the transactions.
The Group entities use either EUR, TRY, Tunisian Dinar or GEL as functional currencies since these currencies are used to a significant
extent in, or have a significant impact on, the operations of the related Group entities and reflect the economic substance of the
underlying events and circumstances relevant to these entities. All currencies other than the currency selected for measuring items
in the financial statements are treated as foreign currencies. Accordingly, transactions and balances not already measured in the
functional currency have been re-measured to the related functional currencies in accordance with the relevant provisions of IAS 21
(“The Effects of Changes in Foreign Exchange Rates”). The Group uses EUR as the reporting currency.
The financial statements of subsidiaries that report in the currency of a hyperinflationary economy (Turkey) are restated in terms of
the measuring unit current at the balance sheet dates until 31 December 2005 before they are translated into EUR. Turkey came off
highly inflationary status for the period beginning after 15 December 2005, therefore restatement for IAS 29 has not been applied
since 1 January 2006.
The financial statements of subsidiaries, namely BTA, TAV İşletme and TAV Güvenlik, which have the TRY as their functional
currency, were restated to compensate for the effect of changes in the general purchasing power of the TRY until 31 December
2005, in accordance with IAS 29 as TRY was the currency of a hyperinflationary economy. Financial statements of such subsidiaries
are then translated into Euro, the main reporting currency of the Group, by the exchange rate ruling at balance sheet date.