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The preparation of consolidated financial statements
in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management
to make judgements in the process of applying
the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to
the financial statements are disclosed in Note 4.
B Consolidation
Subsidiaries in which the Company has direct or indirect
controlling interest are consolidated. Control is
defined as the power to govern the financial and operating
policies of an enterprise so as to obtain benefits
from its activities. Control is normally evidenced
when the Company owns, either directly or indirectly,
more than 50% of the voting rights or potential voting
rights of a company’s share capital that are currently
exercisable.
The consolidated financial statements of Newron Group
include the accounts of Newron Pharmaceuticals
S.p.A., Newron Suisse SA and Hunter-Fleming Ltd.
The consolidation commences from the date on which
the subsidiary has been incorporated or established.
The purchase method is used to account for the acquisition
of subsidiaries by the Company. The cost of an
acquisition is measured at the fair value of the assets
given, equity instruments issued and liabilities
incurred or assumed at the date of exchange. Identifiable
assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at their fair value at the acquisition date,
irrespective of the extent of any minority interest. The
excess of the cost of acquisition over the fair value of
the Group’s share of the identifiable net assets acquired
is recorded as goodwill. If the cost of acquisition is less
than the fair value of the net assets of the subsidiary
acquired, the difference is recognized directly in the
income statement.
Intercompany balances and transaction between
group companies are eliminated.
C Change in accounting policies
The accounting policies used in the preparation of the
consolidated financial statements are consistent with
those applied in the previous year, except for the
adoption of new or revised standards, amendments to
Standards and interpretation as noted below:
IAS 24 (Revised), “Related party disclosures”,
(effective January 1, 2011): The revised standard
modifies the definition of a related party
and removes the requirement for government-related
entities to disclose details of
all transactions with the government and
other government-related entities.
IAS 32 Financial Instruments: Presentation
(Amendment): The IASB issued an amendment
that alters the definition of a financial
liability in IAS 32 to enable entities to classify
rights issues and certain options or warrants
as equity instruments. The amendment
is applicable if the rights are given pro
rata to all of the existing owners of the same
class of an entity’s non-derivative equity
instruments, to acquire a fixed number of the
entity’s own equity instruments for a fixed
amount in any currency.
IFRIC 14 (Amendment), “Prepayments of a minimum
funding requirement”
IFRIC 19 “Extinguishing financial liabilities with
equity instruments”
IFRS 1 (Amendment), “First-time adoption of International
Financial Reporting Standard” –
Limited exemption from comparative IFRS 7
Disclosures for first-time adopters
In 2011 the Group has implemented various amendments
to existing standards and interpretations which have
no material impact on the Group’s overall results and
financial position.
New standards, amendments and interpretations
issued but not effective for the financial year beginning
January 1, 2011,and not early adopted:
Notes to the Consolidated Financial Statements – Newron Annual Report 2011 4 5