to download Telecom Italia Annual Report 2011 - Company Reporting

Note 1 – Form, content and other
general information
Form and content
Telecom Italia is a joint-stock company (S.p.A.) organized under the laws of the Republic of Italy.
The registered offices of Telecom Italia S.p.A. are located in Milan, Italy at Piazza degli Affari 2.
The duration of Telecom Italia, as stated in the company’s bylaws, extends to December 31, 2100.
Telecom Italia S.p.A. operates in Italy in the fixed and mobile telecommunications sector.
The Telecom Italia S.p.A. separate financial statements for the year ended December 31, 2011 have
been prepared on a going concern basis (further details are presented in the Note “Accounting Policies”)
and in accordance with the International Financial Reporting Standards issued by the International
Accounting Standards Board and approved by the European Union (designated as “IFRS”), as well as the
laws and regulations in force in Italy (particularly the measures enacted implementing art. 9 of
Legislative Decree 38 of February 28, 2005).
In 2011, Telecom Italia applied the accounting policies on a basis consistent with those of the previous
years and did not elect the early adoption of any IFRS.
The separate financial statements have been prepared under the historical cost convention, except for
available-for-sale financial assets, financial assets held for trading and derivative financial instruments
which have been measured at fair value. The carrying amounts of hedged assets and liabilities have
been adjusted to reflect the changes in fair value of the hedged risks (fair value hedge).
In accordance with IAS 1 (Presentation of Financial Statements), comparative information included in
the separate financial statements, unless otherwise indicated, refers to the preceding year.
The statements of financial position, the separate income statements and the statements of
comprehensive income and the statements of changes in equity are presented in euros (without cents),
while the statements of cash flows and the notes to these separate financial statements are presented,
unless otherwise indicated, in thousands of euros.
Publication of the Telecom Italia S.p.A. separate financial statements for the year ended
December 31, 2011 was approved by resolution of the board of directors’ meeting held on
March 29, 2012.
However, final approval of the Telecom Italia S.p.A. separate financial statements rests with the
shareholders’ meeting.
Financial statement formats
The financial statement formats adopted are consistent with those indicated in IAS 1. In particular:
• the statement of financial position has been prepared by classifying assets and liabilities according
to “current and non-current” criterion;
• the Separate income statement has been prepared by classifying operating expenses by nature of
expense as this form of presentation is considered more appropriate and representative of the
specific business of the Company, conforms to internal reporting and is in line with the industrial
sector of reference.
In addition to EBIT or Operating Profit (loss), the separate income statement includes the alternative
performance measure of EBITDA or Operating profit (loss) before depreciation and amortization,
Capital gains (losses) and Impairment reversals (losses) on non-current assets.
In particular, besides EBIT, EBITDA is used by Telecom Italia as the financial target in internal
presentations (business plans) and in external presentations (to analysts and investors). It
represents a useful unit of measurement for the evaluation of Telecom Italia’s operating
performance. EBIT and EBITDA are calculated as follows:
Telecom Italia S.p.A. Separate Financial Statements Note 1 – Form, content and other general information 312