Tiscali 2012 Annual Report Download - page 67

Annual financial report as at 31 December 2012
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Date File Name Status Page
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Annual Report as at 31
December 2012 67
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discounted at a rate that reflects the current market estimate of the cost of money, the cost of capital
and the risks specific to the unit. If the estimated recoverable amount of the unit concerned is lower
than the relevant book value, it is decreased to the least recoverable value. Impairments are booked to
the income statement under write-down costs and are not subsequently reversible.
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 Euro 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 at 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 Euro, are translated into Euro 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 emerging from intra-group receivable/payable transactions of a financial
nature are recorded in the shareholders’ equity special conversion reserve.
The main exchange rates used for translation of the 2012 and 2011 financial statements for foreign
companies into Euro were:
31 December 2012 31 December 2011
average final average final
GB pound 0,81237 0,81610 0,84405 0,8353
Other intangible assets
Computer software – Development costs
Acquired computer software licenses are capitalised and included among intangible assets at
purchase cost and are amortised on a straight-line basis over their estimated useful lives.