Annual Report 2010 - Enel.com

The recoverability of deferred tax assets is reviewed at
each period-end. Taxes in respect of components recognized
directly in equity are also taken directly to equity.
Dividends
Dividends from equity investments are recognized when
the shareholder’s right to receive them is established.
Dividends and interim dividends payable to third parties
are recognized as changes in equity at the date they are
approved by the Shareholders’ Meeting and the Board of
Directors, respectively.
Discontinued operations and non-current
assets held for sale
Non-current assets (or disposal groups) whose carrying
amount will mainly be recovered through sale, rather than
through ongoing use, are classified as held for sale and
shown separately from the other balance sheet assets and
liabilities. Non-current assets (or disposal groups) classified
as held for sale are first recognized in compliance with
the appropriate IFRS/IAS applicable to the specific assets
and liabilities and subsequently measured at the lower
of the carrying amount and the fair value, net of costs to
sell. Any subsequent impairment losses are recognized as
a direct adjustment to the non-current assets (or disposal
groups) classified as held for sale and expensed in the income
statement. The corresponding values for the previous
period are not reclassified.
A discontinued operation is a component of an entity that
has been divested or classified as held for sale and:
> represents a major line of business or geographical
area of operations;
> is part of a single coordinated plan to dispose of a
separate major line of business or geographical area
of operations; or
> is a subsidiary acquired exclusively with a view to resale.
Gains or losses on operating assets sold – whether disposed
of or classified as held for sale – are shown separately in the
income statement, net of the tax effects. The corresponding
values for the previous period, where present, are reclassified
and reported separately in the income statement,
net of tax effects, for comparative purposes.
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Recently issued accounting
standards
First-time adoption and applicable
standards
The Group has adopted the following international accounting
standards and interpretations taking effect as
from January 1, 2010:
> “Amendments to IAS 27 - Consolidated and separate financial
statements”. The new version of the standard
establishes that disposals of equity interests in a subsidiary
that do not result in a loss of control shall be
recognized in equity in the consolidated financial statements.
Similar treatment is required in the consolidated
financial statements in the event of the acquisition of an
additional stake in an existing subsidiary. Where a controlling
interest is divested, any residual interest must
be re-measured to fair value on that date, recognizing
the effects through profit or loss. The application of the
standard led to the recognition in equity of the gain (net
of taxes and transaction costs) on the disposal of 30.83%
of Enel Green Power in the amount of €796 million.
> “Amendments to IAS 39 - Financial instruments: recognition
and measurement: eligible hedged items”. With this
amendment to the current IAS 39 standard, the IASB has
clarified the conditions under which certain financial/
non-financial instruments may be designated as hedged
items. The amendment specifies that an entity may also
choose to hedge only one kind of change in the cash
flow or in the fair value of the hedged item (i.e. that the
price of a hedged commodity increases beyond a specified
price), which would constitute a one-sided risk. The
IASB also specifies that a purchased option designated
as a hedge in a one-sided risk hedge relationship is perfectly
effective only if the hedged risk refers exclusively
to changes in the intrinsic value of the hedging instrument,
not to changes in its time value as well.
The retrospective application of the standard did not
have an impact in the period under review.
> “Amendments to IFRS 2 - Share-based payment”. The
amendments seek to:
- clarify the scope of application of the standard,
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