Annual Report 2010 - Enel.com

incorporating the guidelines contained in IFRIC 8
“Scope of IFRS 2”;
- provide guidelines for classifying share-based payments
in the consolidated financial statements and
separate financial statements of the companies involved;
- specify the accounting treatment of equity-settled
share-based payments involving different Group
companies, incorporating and expanding on the
guidelines contained in IFRIC 11 “IFRS 2 - Group and
treasury share transactions”;
- specify the accounting treatment of cash-settled
share-based payments involving different Group
companies, a situation not addressed by IFRIC 11.
The retrospective application of the amendments –
which replaced IFRIC 8 and IFRIC 11 – did not have an
impact in the period under review.
> “Revised IFRS 3 - Business combinations”: the new version
introduces important amendments to the acquisition
method for the recognition of business combinations.
The changes include:
- the obligation to recognize in profit or loss any
changes in contingent consideration, as well as the
transaction costs of the business combination;
- the possibility of opting for either the full goodwill or
the partial goodwill approach in choosing the methodology
for initial recognition of goodwill;
- the obligation to recognize, in the case of the acquisition
of additional holdings after acquiring control,
the positive difference between the purchase price
and the corresponding share of equity as an adjustment
of equity;
- the obligation to recognize in profit or loss the effects
of the fair value measurement, at the date of
acquisition of control, of the holdings acquired previously
in business combinations achieved in stages.
The application of the standard on a prospective basis
did not have an impact in the period under review.
> “IFRIC 12 - Service concession arrangements”. The interpretation,
applied retrospectively as from January 1,
2009, requires that, depending on the characteristics of
the concession arrangements, the infrastructure used
to deliver the public services shall be recognized under
intangible assets or under financial assets, depending,
respectively, on whether the concession holder has the
right to charge users of the services or it has the right
to receive a specified amount from the grantor agency.
The new interpretation applies to both infrastructure
166 Enel Annual Report 2010 Consolidated financial statements
that the concession holder builds or acquires from a
third party for the purposes of the service arrangement
and existing infrastructure to which the concession
holder is given access by the grantor for the purposes
of the service arrangement. More specifically, IFRIC 12
applies to service concession arrangements between
public grantors and private operators if:
- the grantor controls or regulates what services the
operator must provide using the assets, to whom,
and at what price; and
- the grantor also controls, via ownership or other arrangement,
any significant residual interest in the assets
at the end of the term of the arrangement.
On the basis of the analysis conducted with respect to
the concession for the distribution of electricity operated
in Italy, the conditions for application of IFRIC 12
do not apply, as the concession holder has full control,
as defined in the interpretation, of the infrastructure
serving the electricity distribution service. The provisions,
however, are applicable to the infrastructure
serving the electricity distribution concessions held by
the Endesa Group companies operating in Brazil.
The effects of the application of the interpretation are
discussed in note 4 to the consolidated financial statements.
> “IFRIC 15 - Agreements for the construction of real estate”.
This interpretation sets out the guidelines for recognizing
revenues and costs arising from the contracts
for the construction of real estate and clarifies when a
contract falls within the scope of “IAS 11 - Construction
contracts” and “IAS 18 - Revenue”. The interpretation
also specifies the accounting treatment to be used in
respect of revenues from the delivery of additional services
relating to real estate under construction.
The interpretation was not applicable to the Group.
> “IFRIC 16 - Hedges of a net investment in a foreign operation”.
The interpretation applies to entities that intend
to hedge the exchange rate risk associated with a net
investment in a foreign operation.
The main aspects of the interpretation are:
- the hedge may only cover the exchange rate difference
between the functional currency (not the presentation
currency) of the foreign operation and the functional
currency of the parent (a parent being a controlling entity
at any level, whether intermediate or final);
- in the consolidated financial statements, the risk
may be designated as hedged only once, even if
more than one entity in the same group has hedged