Tiscali 2009 Annual Report Download - page 165

Tiscali Group: Annual Report 2009
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subject to market value reduction. If there is objective evidence, the value loss must be recorded as cost in
the income statement of the period.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, cash and short term deposits, and in the latter case with
an original maturity date of no more than three months or less.
Debts and financial liabilities
Tiscali S.p.A.’s debts and financial liabilities are set out in the “debts to banks and other financial institutions”,
“other non current liabilities and “debts to suppliers” items and are stated at face value. Financial debts
are initially stated at cost, equal to the fair value of the consideration received, net of ancillary charges. Later
on, those debts are valued at depreciated cost using the actual interest method, calculated considering the
costs of issue and each further premium or discount due at maturity.
Liabilities for pension obligations and staff severance
Defined benefit schemes (as classified by IAS 19), in particular the Staff Severance indemnities relating
to employees of the parent company and the subsidiaries with registered offices in Italy, are based on
valuations performed at the end of each financial year by independent actuaries. The liability recognised in
the balance sheet is the current 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.
As permitted under IFRS and IAS 19, the Tiscali Group has not adopted the corridor approach but has used
the Unified Loan Projection method and thus the actuarial profits and losses are fully noted in the period in
which they arise and are directly entered on the profit and loss account.
Payments made in relation to outsourced pension schemes and defined contributions schemes are
booked to the income statement 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 Act and relevant implementing decrees introduced remarkable
changes in the staff severance indemnity regulation, including the worker’s choice in relation to assigning
one’s indemnity to supplementary pension funds or to the “Treasury Fund” managed by the 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”.
Furthermore, the law changes taking place starting from 2007 implied a new calculation of actuarial
assumptions, and of the consequent methods used to calculate staff severance indemnities, whose effects
were directly ascribed to the income statement.
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). Those plans are a component of the beneficiaries’ remunerations.