Annual Report 2010 - AdP

isks of the asset in question. The recoverable amount of the assets that do not generate independent cash flows by themselves is
determined in conjunction with the cash generating unit in which the assets are inserted.
Reversal of impairment losses
An impairment loss recognized in a medium and long-term receivable amount shall only be reversed if the justification for the increase
in the respective recoverable amount pertains to an event that has occurred after the date on which the impairment loss was
recognized. An impairment loss recognized in relation to goodwill shall not be reversed. Impairment losses related to other assets are
reversed whenever there are changes in the estimates used to determine the respective recoverable amount. Impairment losses are
reversed up until the value, net of amortizations, that the asset would have had if the impairment loss had not been recognized.
2.13 Equity
Ordinary shares are classified as total equity. Costs directly attributable to the issue of new shares or options are stated in total
equity as a deduction, net of taxes, at the issued amount.
2.14 Dividends payable
Dividends are recognized as liabilities when declared.
2.15 Investment grants
Investment grants are recognized when there is reasonable certainty that the subsidy will be received and that AdP will comply with
obligations related to receiving it. Investment grants related to acquiring and/or constructing tangible and/or intangible assets are
included in non-current liabilities and are credited in the income statement using the same method that is used to amortize the
underlying assets.
The other grants are deferred and recognized in the income statement during the same period of the costs they are supposed to
offset.
2.16 Provisions, assets and contingent liabilities
Provisions are only recognized when there is an underlying obligation, resulting from past events, which may require allocation of internal
resources to pay, and whose amount can estimated reliably. Whenever any of the criteria is not met, or the existence of the obligation
is conditional upon the occurrence (or non-occurrence) of certain future event, AdP shall state such fact as a contingent liability, unless
the assessment of the requirement for outflow of resources for payment of this obligation is considered remote. When there is a high
number of similar obligations, the probability of generating an outflow of internal resources is determined jointly. The provision is
recognized even if the probability of outflow of internal resources regarding an element included in the same class of obligations is low.
Underlying obligations that result from onerous contracts and valued as provisions. An encumbered contract exists when the
Company is an integral part of the provision of an agreement contract whose compliance has associated costs that unavoidably
exceed the future economic benefits derived from them.
Provisions are measured at present value, at the balance sheet date, on the basis of the best estimate of the Board of Directors
regarding the expense necessary to fulfil the obligation. The discount rate used to determine the present value reflects the current
market expectation for the discount period and for the provision risk in question.
There are no provisions recognized for future operational losses.
Contingent assets and liabilities
Contingent assets and liabilities are not recognized in the financial statements, but are disclosed in the attached notes. In cases where
the possibility of an outflow of resources that incorporate economic benefits is remote, or if the influx of economic benefits is not
likely, the respective contingent liabilities or contingent assets are not disclosed.
2.17 Taxation
Income tax for the period includes current taxes and deferred taxes. Income tax is recorded in the income statement, except when
related to items that are recognized directly under shareholder equity. The amount of current tax payable is determined on the basis
of income before taxes, adjusted according to tax regulations.
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