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<strong>IT</strong> HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2003<br />
The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in<br />
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects<br />
current market assessments of the time value of money and the risk specific to the asset. For an asset that does not<br />
generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which<br />
the asset belongs.<br />
Reversals of impairment<br />
An impairment loss in respect of receivables is reversed if the subsequent increase in recoverable amount can be<br />
related objectively to an event occurring after the impairment loss was recognized.<br />
An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific external event of an<br />
exceptional nature that is not excepted to recur, and the increase in recoverable amount relates clearly to the reversal<br />
of the effect of that specific event.<br />
In respect of other assets, an impairment loss is reversed if there has been a change in the estimate used to determine<br />
the recoverable amount.<br />
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying<br />
amount that would have been determined, net of depreciation or amortization, if no impairment loss had been<br />
recognized.<br />
Government grants<br />
Government grants are recognized in the balance sheet initially as deferred income when there is reasonable<br />
assurance that it will be received and the group will comply with the condition attaching to it. Grants that compensate<br />
the Group for expense incurred are recognized as revenues in the income statement on a systematic basis in the same<br />
periods in which the expenses are incurred. Grants that compensate the Group for the cost of an asset are recognized<br />
in the income statement as revenues on a systematic basis over the useful life of the asset.<br />
Share capital<br />
Treasury Shares<br />
When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly<br />
attributable costs, is recognized as a change in equity. Repurchased shares have been deducted from equity allocating<br />
the purchase price to capital stock for the nominal value of the shares and to share premium for the excess over the<br />
nominal value.<br />
Dividends<br />
Dividends are recognized as a liability in the period in which they are declared.<br />
Interest-bearing borrowings<br />
Interest-bearing borrowings are recognized initially at cost, less attributable transaction costs. Subsequent to initial<br />
recognition, interest-bearing borrowings are stated at amortized cost with any difference between cost and redemption<br />
value being recognized in the income statement over the period of the borrowings on an effective interest basis.<br />
Pension liabilities and termination leaving indemnities<br />
The Group’s contributions to defined contribution pension plans are charged to the income statement in the period to<br />
which the contributions relate.<br />
Termination leaving indemnities are calculated on an actuarial basis or in accordance with applicable local law to the<br />
extent that the amount of the liability does not differ materially from the amount which would have been calculated on<br />
an actuarial basis.<br />
All actuarial gains and losses as at January 1, 2001, the date of transition to IFRS, were recognized.<br />
F- 53
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