Tiscali 2007 Annual Report Download - page 125

booked to equity is included in the income statement for the
period. The original value is re-recognised in the following fi-
nancial year if the reasons for write-down are considered to
no longer apply.
Receivables from customers and other receivables
Receivables are initially stated at their nominal value (repre-
sentative of the ‘fair value’ of the transaction) and are subse-
quently valued at amortised cost, net of writedowns for
impairment, booked to the income statement when there is
objective evidence that the asset is impaired. Such write-
downs are calculated as the difference between the carrying
amount and the present value of estimated future cash flows,
discounted at the effective interest rate. Particularly with re-
gard to short-term trade receivables, considering the scarce
significance of the period of time, the valuation at amortised
cost is equivalent to the nominal value, less writedowns for
impairment.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, current ac-
counts and deposits held on demand with banks, and other
short-term highly liquid financial investments readily convert-
ible to an amount of cash and are subject to an insignificant
risk of changes in value. Cash and cash equivalents are
stated at fair value, corresponding to their nominal value, or
at cost plus interest charges, if any.
Bonds
The Company has no existing bond issues.
Payables to banks
Interest-bearing bank loans and overdrafts are recorded on
the basis of the amounts received net of transaction costs and
are subsequently measured at amortised cost, using the ef-
fective interest rate method.
Payables to suppliers and other payables
Trade payables and other payables are stated at amortised
cost which, considering the characteristics and maturity of
such payables, is generally equivalent to the nominal value.
Derivative instruments
The Company has no existing contracts relating to derivatives.
2.8 Liabilities for pension obligations and staff severance in-
demnities
Defined benefit schemes (as classified by IAS 19), in particular
the Staff Severance indemnities relating to employees of the
Company, are based on valuations performed at the end of each
financial year by independent actuaries. The liability booked in
the balance sheet is the present value of the obligation payable
on retirement and accrued by employees at the balance sheet
date. It should be specified that no assets are held in support of
the above scheme. The Company has not adopted the ‘corridor
approach’, therefore actuarial gains and losses are entirely recog-
nised in the period in which they arise and are directly recorded
in the income statement.
Payments made in relation to outsourced pension schemes and
defined contributions schemes are booked to the income state-
ment in the period in which they are due. The Group does not
recognise post-employment benefit schemes, therefore periodic
contributions do not involve further liabilities or obligations to be
recognised as such in the financial statements.
As from 1 January 2007, the 2007 Finance Bill and the re-
lated implementing decrees introduced significant amend-
ments to the regulation of staff severance indemnities (TFR),
including the worker’s choice regarding the allocation of their
accruing TFR to supplementary welfare funds or to the “ Trea-
sury Fund” managed by INPS (national insurance institute for
social security).
Therefore, the obligation vis-à-vis INPS and the contribution to
the supplementary pension schemes takes on the form, as per
IAS 19, of “Defined contribution schemes”, while the portions
recorded in the staff severance indemnity (TFR) remain “Defined
benefit schemes”.
The legislative amendments introduced as from 2007 also led to
a re-determination of the actuarial assumptions and the conse-
quent calculations used for determining the staff severance in-
demnity (TFR); the effects have been booked directly to the
income statement
2.9 Provisions for risks and charges
Provisions for risks and charges are recognised when the Com-
pany has a present obligation as a result of a past event and is
likely to be required to settle that obligation. Provisions are meas-
ured at the Directors’ best estimate of the expenditure required
to settle the obligation at the balance sheet date and are dis-
counted to present values where the effect is material.
2.10 Remuneration schemes involving interests in the share
capital
The Group has assigned certain members of senior management
and employees additional benefits via plans for interests in the
share capital (stock option plans). These plans represent a com-
ponent of the remuneration of the beneficiaries.
The cost, represented by the fair value of the stock options as of
the date of allocation is recorded, for accounting purposes in ac-
cordance with “IFRS 2- Payments based on shares” in the in-
come statement with a matching balance directly under
shareholders’ equity.
2.11 Revenue recognition
Revenues from sales of services are recognised net of discounts,
rebates and bonuses in the period in which the services are ren-
TISCALI S.P.A. – SINANCIAL STATEMENTS AT 31 DECEMBER 2007
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