Annual Report 2010 - AdP

Assets that result from contractual compensation by the seller in relation to the result of contingencies related, in whole or in part,
to a specific liability of the concentrated entity have to become recognized and measured using the same principles and criteria of
the related liabilities.
Determination of fair value of acquired assets and acquired liabilities takes into account the fair value of the contingent liabilities that
result from a present obligation originated by a past event (if the fair value can be measured reliably), regardless if outflow is expected
and likely.
For each acquisition the group can opt to measure “non-controlled interests” at the respective fair value or the respective share in
the assets and liabilities transferred from the acquiree The choice of one method over another influences the amount of goodwill
that will be recognized. When the concentration of business activities is performed in phases, the fair value at the previous acquisition
date of the interests held is revaluated at fair value at the date on which control is obtained, under results for the period when
control is achieved, thereby affecting determination of goodwill.
Goodwill is considered to have an undefined useful life and is thus not amortizable and is subject to impairment annual tests regardless
of whether or not there are indications of impairment.
Whenever a concentration is not concluded at the report date, it shall be adjusted retrospectively during a maximum period of one
year from the date of acquisition, the temporary amounts being recognized at the acquisition date and/or additional recognized
assets and liabilities if new information is obtained regarding facts and circumstances that existed at the date of acquisition and if
they had been known would have resulted in the recognition of these assets and liabilities at that date.
Acquisitions prior to 2010:
Compared to the processing described above applicable as of 1 January 2010 the following differences exist:
- The cost of an acquisition includes the costs directly attributable to the acquisition and thus they affect goodwill ;
Non-controlled interests of the acquiree (previously referred to as minority interest were valued only in terms of the share in the
identifiable net assets of the acquiree but they did not figure in determining goodwill/gain of the concentration;
- When the concentration of the business activities was conducted over various phases, the fair value at the previous acquisition
date of the interests held was not revalued at the date when control was obtained and as such previously recognized goodwill
remained unaltered;
- Any contingent acquisition value was recognized only if the group had a present obligation, outflow was probable and the estimate
was reliably determinable; subsequent changes to this amount were recognized as goodwill.
Intragroup balances and transactions and unrealized gains from transactions between group companies are eliminated. Unrealized
losses are also eliminated except when the transaction shows evidence of impairment of a transferred good.
Accounting policies of the subsidiaries are changed whenever necessary, in order to guarantee consistency with policies adopted by
the group.
In situations where the group substantially controls entities created for a specific purpose, even if it does not own capital holdings
directly in these entities, these entities are consolidated via the full consolidation method.