Tiscali 2009 Annual Report Download - page 91

Tiscali Group: Annual Report 2009
90
On first time adoption of the IFRS and in accordance with the exemption envisaged by IFRS 1, it was not
considered necessary to avail of the option of ‘reconsidering’ the acquisition transactions carried out prior to
1 January 2004. Consequently, the goodwill deriving from the business acquisitions which took place prior
to this date, has been stated at the value recorded for this purpose in the last set of financial statements
drawn up on the basis of the previous accounting standards (1 January 2004, date of changeover to
the IFRS), subject to checking and statement of any impairment losses which arose as of the date this
document was drawn up.
On disposal of a subsidiary, the net book value of the goodwill is calculated as the expected capital gain or
loss on disposal.
Foreign currency transactions
The financial statements of foreign subsidiaries are presented in the currency of the primary economic
environment in which they operate (operating currency). When preparing the financial statements of the
individual companies, transactions in currencies other than EUR are initially recognised at the exchange
rate prevailing at the time. At the reference date, the monetary assets and liabilities expressed in the above-
mentioned currencies are retranslated to the rates prevailing at that date. Non-monetary items recognised
at ‘fair value’ and expressed in foreign currency are retranslated at the rates prevailing on the date of the
fair value calculation.
Exchange differences arising from settlement of monetary items and retranslation of monetary items using
current exchange rates at year end, are booked to the income statement for that period.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of foreign
subsidiaries with operating currencies other than EUR, are translated into EUR at the rates prevailing at the
financial year end date. Revenues and costs are translated at the average exchange rates for the period.
The exchange differences arising from the application of this method are classified as equity under the
Translation reserve. This reserve is booked to the income statement as income or expense in the period in
which disposal of the foreign subsidiary is completed.
The exchange differences coming up from intra-group receivable/payable relationships of financial character
are recorded in the shareholders’ equity special conversion reserve.
The main exchange rates used for translation of the 2009 and 2008 financial statements for foreign
companies into EUR were:
31 December 2009 31 December 2008
Average Final Average Final
GB pound 0.89104 0.88810 0.90448 0.95250