+1 - Solvay

• IFRIC 14 IAS 19
The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction
(applicable for accounting periods beginning on or
after 1 January 2008).
Adoption of these new standards and interpretations
in subsequent years should not significantly impact
the consolidated financial accounts.
2. Consolidation
Companies controlled by the Group (i.e. in which
the Group has, directly, or indirectly, an interest of
more than one half of the voting rights or is able
to exercise control over the operations) have been
fully consolidated. Separate disclosure is made of
minority interests.
All significant transactions between Group
companies have been eliminated on consolidation.
Companies over which the Group exercises joint
control with a limited number of partners (joint
ventures) are consolidated using the proportionate
consolidation method.
Investments in companies over which the Group
exercises significant influence, but which it does not
control, are accounted for using the equity method.
The main exchange rates used are:
3. Goodwill
Goodwill represents the difference between the cost
of acquisition and the Group’s interest in the fair value
of the identifiable assets and liabilities of a subsidiary or
joint venture, at the acquisition date.
Positive goodwill is not amortized, but tested at
least annually for impairment. Any negative goodwill
is immediately credited to the income statement.
4. Foreign currencies
Foreign currency transactions by Group companies
are recorded initially at the exchange rates prevailing
at the transaction dates. Monetary assets and liabilities
denominated in such currencies are then re-translated
at the exchange rates prevailing at the end of
the accounting period with resulting profits and losses
recorded in the income statement for the period.
Assets and liabilities of foreign entities included
in the consolidation are translated into EUR at
the exchange rates prevailing at the end of
the accounting period. Income statement items
are converted into EUR at the average exchange rates
for the period. The resulting translation differences
are transferred to the equity item “currency translation
differences”.
Year-end rate Average rate
2006 2007 2006 2007
1 Euro =
Pound sterling GBP 0.6715 0.7334 0.6817 0.6843
US Dollar USD 1.3170 1.4721 1.2554 1.3706
Argentinian Peso ARS 4.0474 4.6348 3.8594 4.2696
Brazilian Real BRL 2.8144 2.6220 2.7329 2.6638
Thai Baht THB 46.7701 43.7999 47.5826 44.4257
Japanese Yen JPY 156.9299 164.9300 146.0278 161.2498
Financial
Solvay Global Annual Report 2007
71