Experian 2009 Annual Report Download - page 82

80 Experian Annual Report 2009
2. Basis of preparation and signicant accounting policies (continued)
Foreign currency translation
Presentation currency
The Group’s nancial statements are presented in US dollars.
Transactions and balances
Transactions in foreign currencies are recorded in the functional currency of the relevant Group undertaking at the exchange
rate prevailing on the date of the transaction. At each balance sheet date, monetary assets and liabilities denominated in
foreign currencies are retranslated at the exchange rate prevailing at the balance sheet date. Translation differences on
monetary items are taken to net nancing costs in the Group income statement except when deferred in equity, as qualifying
net investment hedges or cash ow hedges.
Translation differences on non-monetary available for sale nancial assets are reported as part of the fair value gain or loss in equity.
Group undertakings
The results and nancial position of Group undertakings whose functional currencies are not US dollars are translated into
US dollars as follows:
Assets and liabilities are translated at the closing exchange rate at the balance sheet date;
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Income and expenses are translated at the average exchange rate for the year (unless this average is not a reasonable -
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the transactions); and
All resulting exchange differences are recognised as a separate component of equity.
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On consolidation, exchange differences arising from the translation of the net investment in Group undertakings whose functional
currency is not the US dollar, and of borrowings and other currency instruments, primarily foreign exchange contracts, designated as
hedges of such investments, are taken directly to equity. Tax charges and credits attributable to those exchange differences are taken
directly to equity. When such an undertaking is sold, such exchange differences are recognised in the Group income statement as
part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of such entities are treated as assets
and liabilities of the entities and are translated into US dollars at the closing exchange rate.
Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate geographical area of operation or
a separate major line of business. Classication as a discontinued operation occurs upon disposal or earlier, if the operation
meets the criteria to be classied as held for sale, under IFRS 5.
Share-based payments
The Group has a number of equity settled, share-based employee incentive plans. These include awards in respect of shares in
the Company made at or after the demerger of Experian and Home Retail Group from GUS plc in October 2006, together
with awards previously made in respect of shares in GUS plc which were rolled over into awards in respect of shares in the
Company at demerger. The fair value of options and shares granted is recognised as an expense in the Group income statement
on a straight line basis over the vesting period, after taking into account the Group’s best estimate of the number of awards
expected to vest. The Group revises the vesting estimate at each balance sheet date. Non-market performance conditions are
included in the vesting estimates. Expenses are incurred over the vesting period. Fair value is measured at the date of grant
using whichever of the Black-Scholes model, Monte Carlo model and closing market price is most appropriate to the award.
Market-based performance conditions are included in the fair value measurement on grant date and are not revised for actual
performance.
Goodwill
Goodwill is the excess of the fair value of the consideration payable for an acquisition over the fair value of the Group’s share
of identiable net assets of a subsidiary or associate acquired at the date of acquisition. Fair values are attributed to the
identiable assets, liabilities and contingent liabilities that existed at the date of acquisition, reecting their condition at that
date. Adjustments are made where necessary to bring the accounting policies of acquired businesses into alignment with
those of the Group.
Notes to the Group nancial statements continued
Financial statements