Tiscali 2009 Annual Report Download - page 167

Tiscali Group: Annual Report 2009
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in particular related to the changes in the telecommunications market and to the achievement of the growth
targets set, in a market context denoted by high competitive pressure.
Accounting estimates and relevant assumptions
Provisions for risks and charges
Provisions for risks and charges relating to potential legal and tax liabilities are established following
estimates performed by directors on the basis of judgements developed by the Group legal and tax advisors,
concerning the charges that are reasonably deemed to be incurred in order to settle the obligation.
If in relation to the final result of such judgements the Group is called upon to fulfil an obligation for a sum
other than that estimated, the related effects are reflected in the income statement.
Equity investments
Impairment testing, with particular regard to equity investments, is performed annually as indicated under
the “Impairment of assets” item. The ability of each unit (investment) to produce cash flows sufficient to
recover the value recorded in the financial statements is determined on the basis of forecast economic and
financial data of the company concerned or any subsidiaries. The development of such data, as well as the
determination of an appropriate discount rate, requires a significant use of estimates.
Fair value calculation
Depending on the instrument or financial statements item to be estimated, the directors identify the most
suitable method, by taking into consideration market objective data as much as possible. In absence of
market values, that is, quotations, estimating techniques are used, with reference to the ones which are
most commonly used.
Accounting principles, amendments and interpretations in force at 1 January 2009
The IFRS in force at the 1 January 2009 are stated and briefly illustrated below:
• Amendments to IAS 1 (Financial Statement Reporting). On the 17 December 2008, EC regulation no.
1274-2008 was published which incorporated the amendments made to IAS 1 (Financial Statement
Reporting) into community law. The main amendments introduced provide for: The presentation in the
statement of changes in Net Assets for all movements that arose from transactions with shareholders;
and the statement of the changes in Net Assets (other than involving shareholders) as follows:
- A single “Overall Income Statement’ that sets out the revenues and income, costs and charges
entered directly on the income statement, the profit (loss) for the year, and the detail of the income and
costs directly entered under Net Assets (Other components of the overall income statement); that is
- In two statements: one statement that sets out the components of the profit (loss) for the year
(Separate Income Statement) and a second statement that starts from the profit (loss) from the year
and shows the statement items for other overall income statement (Overall Income Statement).
The revised version of IAS 1 came into force on 1 January 2009. The adoption of the principle does not
produce any effect from the point of view of the valuation of the financial statement items.
The principle was applied to the Tiscali Group retrospectively from the 1 January 2009, choosing to highlight
all the changes generated by transactions with non-shareholders in two statements to measures progress