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18
Form and content of the accounting statements
Basis of preparation
The 2012 statutory financial statements represent the separate financial statements of the Parent
Company Tiscali S.p.A. and have been prepared in observance of the International Accounting
Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) as approved by
the European Union, as well as the instructions issued by way of implementation of Article 9 of Italian
Legislative Decree No. 38/2005. The IFRS are understood to be all the reviewed international
accounting standards (“IAS”) and all the interpretations by the International Financial Reporting
Interpretations Committee (“IFRIC”) previously called the Standing Interpretations Committee (“SIC”).
Preparation of the financial statements requires management to make accounting estimates and in
certain cases assumptions in the application of accounting standards. The areas of the financial
statements which, under the circumstances, presuppose the adoption of applicative assumptions and
those more fully characterized by estimates made, are described in the note Critical decisions in
applying accounting standards and in the use of estimates.
Financial statement formats
The consolidated financial statements are composed of accounting statements (Income Statement,
Balance Sheet, Statement of changes in consolidated shareholders’ equity, and Cash Flow Statement),
with explanatory notes. The Income Statement was drawn up in line with the minimum contents fixed by
IAS 1 – Presentation of Financial Statements – with costs assignment by nature; the Balance Sheet
was drawn up by following the scheme pointing out the division of “current/non-current” assets and
liabilities; the Cash Flow Statement was drawn up by following the indirect method.
Accounting standards
General principles
The financial statements were prepared in compliance with the IAS/IFRS International Financial
Reporting Standards (IFRS). The main accounting standards are detailed below. These standards were
applied consistently to all periods presented.
Preparation of the financial statements requires management to make accounting estimates and in
certain cases assumptions in the application of accounting standards. The areas of the financial
statements which, under the circumstances, presuppose the adoption of applicative assumptions and
those more fully characterized by estimates made, are described in the subsequent note of this section.
Equity investments in subsidiaries
Equity investments in subsidiaries and affiliated companies are recognised at cost, adjusted for any
impairment.
In application of IAS 36, the value of equity investments recognised at cost is reduced if there is
impairment or if circumstances emerge that indicate that said cost is not recoverable. If the impairment
is discovered to no longer apply or is reduced, the book value is increased to the new estimated
recoverable value, within the limits of the value recognised initially.
Impairment of assets
The book value of equity investments, other intangible assets and Property, plant and equipment is
tested for impairment whenever there is an indication that the asset may have suffered impairment. The