Notes to the consolidated financial statements - Efacec

1.11 Loans Obtained
Loans are initially recognised at their nominal value or fair value, whenever different, less any impairment loss. Loans are subsequently
presented at amortised cost. Any difference between receipts (net of transaction costs) and the amortized 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 company has an unconditional right to defer payment of the liability until at least
12 months after the balance sheet date.
1.12 Income tax and deferred taxes
EFACEC Capital, SGPS opted for taxation based on consolidated profi ts as from 1993, currently covered by the “Special Rules for
Taxation of Groups of Companies”, (Article 36 of the Corporate Income Tax Code - CIRC). 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 carrying
amounts of assets and liabilities for consolidated fi nancial reporting purposes and amounts used for income tax purposes. 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 of current legislation - 25%, plus the maximum local tax possible
- 1.5% of taxable profi t.
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 subsidiaries 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.
1.13 Provisions
Provisions are booked when the company has a legal or constructive obligation when, 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.
1.14 Recognition of income
Income covers the fair value of the sale of goods and services, net of taxes and commercial discounts and after elimination of
internal sales.
Services rendered
The rendering of services is recognised in the accounting period in which they are rendered, with reference to the phase of completion
of the transaction at the balance sheet date.
1.15 Leases
Leases are classifi ed as operational leases if a signifi cant part of the inherent risks and benefi ts at the time the lease is taken on is
retained by the lessor. Payments made for operational leases are booked in the profi t and loss account on settlement.
Leases of tangible fi xed assets where the Group holds substantially all the risks and benefi ts associated with the asset are classifi ed
as fi nancial leases. Financial leases are capitalised at the beginning of the lease for the lower of the fair value of the asset leased
and the present value of the minimum payments of the lease. Each payment made is split between the capital sum due and the
fi nancial costs, in order to obtain a constant rate on the debt outstanding. Lease obligations net of fi nancial charges are shown in
Other Creditors. The interest is booked to fi nancial costs in the lease period to a constant periodic interest rate on the remaining
debt of each period. Tangible fi xed assets acquired through fi nancial leases are depreciated over the lesser of the useful life of the
asset or the lease period.
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