Download - Ferrovial - Annual Report 2012

Consolidated financial statements at 31 December 2011
Ferrovial S.A. and Subsidiaries
management Ferrovial, S.A. holds effective control because
it holds more than 50% of the voting power, directly or
indirectly through agreements with other shareholders.
When assessing whether Ferrovial controls a company, the
existence and effects of potential voting rights which may
be currently exercised or converted are taken into account.
A subsidiary is included in the scope of consolidation when
the Group formally obtains effective control.
b. Equity method: the equity method is used to account for
all the companies over which Ferrovial S.A. has a
significant influence. Also accounted for using this method,
pursuant to the alternative provided for in IAS 31, are the
other companies over which Ferrovial, S.A. holds joint
control. In the latter case, the Company considers that the
equity method is the method that best ensures fair
presentation, since in these cases of joint control the
Company does not control the assets or have any present
obligation with respect to the liabilities of the investee, but
rather only effectively controls the ownership interest in
the entity. The new IFRS 11, Joint Arrangements, which
will come into force on 1 January 2013, also takes this
stance in relation to joint arrangements.
c. Proportionate consolidation: the contracts that are
undertaken through unincorporated temporary joint
ventures (UTEs) or similar entities are proportionately
consolidated. Unlike the previous case, it is considered that
in these cases of joint control, the parties have a direct
involvement in the assets, liabilities, income, expenses and
joint and several liabilities in these entities. Operations of
this nature contributed to the consolidated Group assets,
profits and sales of EUR 1,119 million, EUR 88 million and
EUR 1,255 million, respectively, in 2011 (2010: EUR 917
million; EUR 60 million and EUR 1,280 million,
respectively).
d. Balances and transactions with Group companies:
balances and transactions between Group companies are
eliminated on consolidation. However, the transactions
recognised in the income statement in relation to
construction contracts performed by the Construction
Division for infrastructure project concession operators are
not eliminated on consolidation, since contracts of this kind
are treated as construction contracts under which the
Group performs work for the concession grantor or
regulator in exchange for the right to operate the
infrastructure under the terms pre-established by the
grantor or regulator. The grantor or regulator thus controls
the asset from inception and grants the above-mentioned
right in exchange for the work performed, and, therefore,
the conclusion may be reached that at Group level the
work is performed for third parties. This is in line with
IFRIC 12. The detail of the transactions not eliminated on
the basis of the foregoing is shown in Note 35 on
"Information on Transactions with Related Parties".
rates prevailing when they joined the Group. Income and
expenses are translated at the cumulative average
exchange rates for the year. Differences arising during the
aforementioned translation process are recognised in
equity under "Translation Differences".
Appendix I contains a list of subsidiaries, associates and joint
ventures.
3.3 Accounting policies applied to each item in the
consolidated statement of financial position and
consolidated income statement
3.3.1 Intangible assets
Intangible assets in the accompanying consolidated statement
of financial position are initially carried at acquisition or
production cost, including capitalisable borrowing costs, and
are subsequently measured at cost less accumulated
amortisation and any impairment losses. Intangible assets with
a finite useful life are amortised on a straight-line basis, or
based on estimated traffic in the case of administrative
concessions over the concession term.
Intangible assets with an indefinite useful life are not amortised
and are tested annually for impairment.
3.3.2 Investments in infrastructure projects
This line item includes the investments made by infrastructure
concession operators under the scope of IFRIC 12 (mainly toll
roads).
It also includes intangible assets and investment property used
in projects of this nature.
The assets acquired by the concession operator to provide the
concession services but which do not form part of the
infrastructure (vehicles, furniture, computer hardware, etc.) are
not included in this line item. Assets of this nature are classified
on the basis of their nature and are depreciated over their
useful life, using a method that reflects their economic use.
e. Translation of financial statements in currencies
other than the euro: the financial statements of
consolidated subsidiaries and joint ventures whose
accounting records are denominated in a currency other
than the euro are translated to euros by applying the yearend
exchange rates to all items in their statements of
financial position, except for equity and investments in
Group companies, which are translated at the exchange
Ferrovial, S.A. Consolidated financial statements at 31 December 2011 11