Half-yearly financial Report at June 30, 2013 - A2A

Half-yearly financial report at June 30, 2013Consolidation policies and proceduresTreatment of put options on the shares of subsidiariesThe Group has granted put options to minority shareholders which entitle them to require theA2A Group to purchase the shares they own at a future date.60Paragraph 23 of IAS 32 states that a contract that contains an obligation for an entity topurchase shares for cash or another financial asset gives rise to a financial liability for thepresent value of the exercise price of the option.As a result, therefore, if the Group does not have the unconditional right to avoid the deliveryof cash or other financial instruments when a put option on the shares of subsidiaries isexercised, a liability must be recognized.In the absence of specific recommendations made by the accounting standards adopted, theA2A Group (i) considers that the shares that are the object of the put option have already beenacquired, even in the case that the risks and rewards connected with the ownership of theshares remain with the minority shareholders and they continue to be exposed to equity risk;(ii) recognizes the liability arising from the obligation and any changes in the liability that donot depend on the simple passage of time (the unwinding of the discounting of the exerciseprice), with a counter-entry to equity; (iii) recognizes the latter in profit or loss.Consolidation policiesGeneral procedureThe financial statements of the subsidiaries, associates and joint ventures consolidated by theA2A Group are prepared at the end of each reporting period using the same accountingpolicies as the parent. Any items recognized by using different accounting principles areadjusted during the consolidation process to bring them into line with Group accountingpolicies. All intragroup balances and transactions, including any unrealized profits arisingfrom transactions between Group companies, are fully eliminated.In preparing the Half-yearly Report the assets, liabilities, income and expenses of thecompanies being consolidated are included in their entirety on a line-by-line basis, with theportion of equity and net income for the period attributable to minority interests being statedseparately in the balance sheet and income statement.The carrying amount of the investment in each subsidiary is eliminated against thecorresponding share of its net equity, including any adjustments to fair value at the acquisitiondate; any differences arising are accounted for in accordance with IFRS 3.Transactions with minority interests which do not lead to the loss of control in consolidatedcompanies are accounted for using the economic entity view approach.