Tiscali 2009 Annual Report Download - page 103

Tiscali Group: Annual Report 2009
102
income statement when the company itself has the right to gain access to the asset, if this involves the
purchase of assets, or when a service is rendered, if this involves the purchase of services. Furthermore,
the standard was amended to clarify in which cases it is possible to adopt the “produced units method”
for the amortization of intangible fixed assets with a specified useful life;
• IAS 39 (Financial Instruments: Recognition and Measurement): the amendment clarifies how the
calculation of the new effective rate of return of a financial instrument must be calculated on conclusion
of a fair value hedge; it also specifies the cases when it is possible to reclassify a derivative instrument
in and outside the category “fair value through the income statement”.
IFRS 5 was also amended (Non-current Assets Held for Sale and Discontinued Operations): the
amendment prescribes that if an entity undertakes a sales program which involves the loss of control over
a subsidiary, it must classify all the assets and liabilities of said subsidiary as held for sale, leaving aside the
fact that, after the sale, it maintains a minority interest in the former subsidiary. The new version of IFRS 5
came into force on 1 January 2010.
Application of the “IFRS improvements” is not expected to have significant effects on the Group’s
consolidated financial statements.
New standards and Interpretations acknowledged by the EU but not yet in force and not yet adopted in advance
As required by IAS 8 (Accounting policies, changes in accounting estimates and errors) the possible impact
the new standards or new interpretations have on the financial statements are set forth below. These
standards, effective after 31 December 2009, were not applied by the Group in advance.
• Amendments to IFRS 3 (Business Combinations). On 3 June 2009, with Regulation no. 495/2009
the European Commission approved an updated version of IFRS 3. The main changes concern the
elimination of the obligation to value each asset and liability of subsidiaries at fair value for every
subsequent acquisition in the event of subsidiary acquisition in phases. Goodwill is determined only
in the final acquisition phase and equal to the difference between the value of any equity investments
immediately prior to acquisition, payment for the transaction and the fair value of net assets acquired.
Moreover, if the Group does not acquire 100% of the company, the shareholdings of minority interests
can be valued at fair value or by using the method already provided by IFRS 3. The revised version of
the standard also provides that all costs related to the business combination are charged to the income
statement and liabilities for payments subject to conditions at the date of the acquisition are to be
reported. The new rules shall be applied starting from 1 January 2010.
• Amendments to IAS 27 (Consolidated and Separate Financial Statements). With Regulation no.
494/2009 of 3 June 2009 the European Commission amended IAS 27 and established that changes
in shareholdings that do not constitute a loss of control shall be treated as equity transactions and so
offset with shareholders’ equity, excluding the previously accepted practice of reporting any goodwill
or capital gain as the difference between the amount paid/received and the pro-rata value of the net
assets acquired/sold. Moreover, it was established that when a parent company loses control of its
subsidiary, but continues to hold interests in the company, it values the investment maintained in the
financial statements at fair value and charges any profit or loss deriving from the loss of control to
the income statement. Lastly, the amendment to IAS 27 requires that all losses attributed to minority
shareholders should be allocated to the minority share, even when they exceed their share in the equity
of the company. The new rules shall be applied starting from 1 January 2010. Amendments to IFRS
5 (Non-current assets held for sale and discontinued operations). This standard prescribes that if an
entity undertakes a sale which involves the loss of control over a subsidiary, it must reclassify all the
assets and liabilities of the subsidiary as held for sale, even when after the sale it maintains a minority
interest in the former subsidiary. The new rules shall be applied starting from 1 January 2010.
• Amendments to IAS 36 (Impairment of Assets). The amendment of this standard provides that additional