Notes to the consolidated financial statements - Efacec

1.11 Accounts receivable from customers and other debtors
Accounts receivable from customers and other debtors are initially recognised at their nominal or fair value, when different, less
any impairment loss. The provision for receivable accounts impairment is set up when there is objective evidence that the Group
will not receive the entire amount outstanding, as per the original conditions established for the debt. The amount of the provision
is the difference between the amount presented and the estimated present value of future cash fl ows, discounted at the effective
interest rate. The amount of the provision is recognised in the profi t and loss account.
1.12 Cash and cash equivalents
The line “Cash and cash equivalents” includes cash, bank deposits, other short-term high liquidity investments and with initial
maturities up to three months. Bank overdrafts are shown in the Balance Sheet under current liabilities in the line Loans.
1.13 Share capital
Ordinary shares are shown in shareholders’ funds.
The incremental costs directly attributable to the issue of new shares or options are shown in shareholders’ funds as a reduction,
net of taxes, of increases in share capital. The incremental costs directly attributable to the issue of new shares or options or the
acquisition of a new business are included in the cost of acquisition as part of the purchase price.
1.14 Loans obtained
Loans are initially recognised at their nominal value or fair value, whenever different, less any impairment loss. Later they are
shown at their amortised cost; any difference between receipts (net of transaction costs) and the amortised value is recognised in
the profi t and loss account throughout the loan period, using the effective rate method.
Loans are shown in current liabilities, unless the Group has an unconditional right to defer payment of the liability until at least 12
months after the balance sheet date.
1.15 Income tax and deferred taxes
EFACEC Capital, S.G.P.S. opted for taxation based on consolidated profi ts as from 1993, currently covered by the “Special Rules
for Taxation of Groups of Companies”. All Group companies whose headquarters are located in Portugal and are subject to the
Portuguese Corporate Income Tax (IRC), and where the direct and indirect share holding is greater than 90%, have been included
in the tax consolidation in accordance with the applicable legislation. The consolidated tax charge is determined on the basis of the
arithmetic sum of taxable profi ts and losses as derived from individual companies’ tax returns.
Deferred taxes are generally recognised using the liability method concerning temporary differences arising from the tax base
of assets and liabilities and their respective values in the consolidated fi nancial statements. However, if the deferred tax arises
through the initial recognition of an asset or liability in a transaction that is not a business concentration that at the date of the
transaction did not affect either the accounting or fi scal result, it is not booked. Deferred taxes are determined by fi scal taxes (and
laws) in force or substantially in force at the balance sheet date and which are expected to be applicable in the period when the
deferred tax asset or the payment of the deferred tax liability takes place. The tax rate that has been used to determine deferred
taxes is that in force according to current legislation – 26.5% including local municipal tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profi ts will be available to make use of the
timing difference.
Deferred taxes on timing differences arising from investments in affi liates and associates are recognised, except when the Group
is able to control the haphazard nature of the reversal of the timing difference and when it is probable that the timing difference
does not revert in the foreseeable future.
Deferred taxes are classifi ed as Current or Non-Current, according to the presentation of the amounts in the balance sheet to which
they relate, or to whether the respective timing differences are reverted in the short or medium/long-term.
1.16 Provisions
Provisions are booked when the Group has a legal or constructive obligation and that, as a result of past events, it is probable
that an outfl ow of resources will be necessary to pay an obligation, and a reliable estimate of the amount of the obligation can be
made.
When there is a number of similar obligations, the probability of generating an outfl ow is worked out together. The provision is
booked even when the probability of an outfl ow, relating to an element included in the same class of obligations, may be reduced.
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