2009 - Jaarverslag

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS4.2 Associated companies, joint ventures and other participating interestsAssociated companies are undertakings in which the Group can exercise significant influence on the financialand operational policy, but in which it has no controlling interest and which are not therefore included in theconsolidation. Joint ventures are companies over which the Group has joint control and in which such controlhas been set forth in an agreement and in which strategic decisions on the financial and operational policy aretaken on the basis of unanimity.Joint ventures are proportionally consolidated. Associated companies are accounted for using the equity methodand are stated at cost on first inclusion.If the Group’s share in losses exceeds the book value of the associated company, the book value is stated atzero and further losses are no longer stated, unless the Group has entered into a legally enforceable or actualliability on behalf of the associated company.Other participating interests over which no significant influence is exercised are valued at fair value and thedividend is stated in the statement of comprehensive income when it is made payable. If no fair value isavailable and other methods do not result in a reasonable estimate, the investment is valued at cost lessimpairment.4.3 Elimination of transactions on consolidationIntragroup balances and transactions between the operating companies in the Group and unrealised profits andlosses on such transactions are eliminated in the preparation of the consolidated financial statements.Unrealised profits on Group transactions with proportionally consolidated joint ventures and investments statedin accordance with the equity method are eliminated in proportion to the Group’s interest in the investment.Unrealised losses are eliminated in the same way as unrealised profits, but only to the extent that there is noindication of impairment.5 FOREIGN CURRENCIES5.1 Transactions in foreign currenciesReceivables and liabilities denominated in foreign currencies are converted into euros at the rate prevailing onthe reporting date. Transactions in foreign currencies are converted into euros at the exchange rate applying onthe transaction date. Foreign exchange translation differences are stated in the statement of comprehensiveincome.Non-monetary assets and liabilities which are denominated in foreign currencies and valued on the basis ofhistorical cost are converted at the exchange rate on the transaction date.5.2 Operating companies and joint ventures outside the eurozoneThe results of operating companies outside the eurozone are converted into euros at the exchange rate on thetransaction date. Assets and liabilities including goodwill and fair value adjustments in respect of acquisitionsare converted at the rate on the reporting date. The resulting translation differences are carried in equity. If anactivity outside the eurozone is fully or partly divested, the respective amount is transferred from equity to thestatement of comprehensive income. The rates of the main currencies against the euro are as follows:92Royal Ten Cate Annual Report 2009