measure and monitor the processes and report results ... - Refresco.de

Financial review 2010
2 Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements, and have been applied consistently
by Group entities.
2.1 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists
when the Group has the power to govern the financial and
operating policies of an entity so as to benefit from its
activities. In assessing control, potential voting rights that
currently are exercisable are taken into account. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences
until the date on which control ceases. The accounting policies
of subsidiaries have been changed where necessary to align
them with the policies adopted by the Group.
The Group uses the acquisition method of accounting to account
for business combinations. The considerations transferred of a
subsidiary is the fair values of the assets transferred, the
liabilities incurred and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset
or liability resulting from a contingent consideration arrangement.
Acquisition­ related costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at
their fair values at the acquisition date.
Investments in subsidiaries are accounted for at cost less
impairment. Cost is adjusted to reflect changes in consideration
arising from contingent consideration amendments.
Transactions eliminated on consolidation
Intra­group balances and transactions, and any unrealized income
and expenses arising from intra­group transactions, are eliminated
in preparing the consolidated financial statements. Unrealized
losses are eliminated in the same way as unrealized gains, but
only to the extent that there is no evidence of impairment.
2.2 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into the
respective functional currencies of Group entities at the
exchange rates at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at
the reporting date are translated into the functional currency
at the exchange rate at that date. The foreign currency gain or
loss on monetary items is the difference between amortized
cost in the functional currency at the beginning of the period,
adjusted for effective interest and payments during the period,
and the amortized 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 into the functional
currency at the exchange rate at the date that the fair value
was determined. Foreign currency differences arising on translation
are recognized in profit or loss, except for differences
arising on financial liabilities designated as a hedge of the net
investment in a foreign operation, which are recognized in the
foreign currency translation reserve (FCTR).
Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated into Euros at the exchange rate at the reporting date.
The income and expenses of foreign operations are translated
into Euros at the exchange rates at the dates of the transactions.
Foreign currency differences arising thereon are recognized,
in other comprehensive income, in the FCTR. When a foreign
operation is disposed of, either in part or in full, the associated
cumulative amount in the FCTR is transferred to profit or loss
as an adjustment to the profit or loss on disposal.
Foreign exchange gains and losses arising on a monetary
item receivable from or payable to a foreign operation, the
settlement of which is neither planned nor likely in the
foreseeable future, are considered to form part of the net
investment in the foreign operation and are recognized in
other comprehensive income in the FCTR.