Tiscali 2012 Annual Report Download - page 71

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 71
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payables are stated at amortised cost using the effective interest rate method, calculated considering
the issue costs and any other premium or discount envisaged on settlement.
Reduction in value of financial assets
For each period the financial statements refer to (annual or half-year), appraisals are made to check
whether objective evidence exists that a financial asset or group of assets has suffered impairment. If
there is objective evidence, the impairment is recorded in the income statement for financial assets
valued at cost or at amortized cost, while for “financial assets available for sale”, the matters already
illustrated above should be referred to.
Derivative financial instruments
The Group does not use derivative instruments.
Liabilities for pension obligations and staff severance indemnities
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 by IFRS 1 and IAS 19, the Tiscali Group has not adopted the corridor method but uses
the Projected Unit Credit method and, therefore, the actuarial gains and losses are stated in full in the
period in which they arise and are booked directly to the income statement.
Payments made in relation to outsourced pension schemes and defined contribution 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 Bill and the related implementing decrees introduced
significant amendments to the regulation of staff severance indemnities (TFR), including the worker’s
choice regarding the allocation of their accruing TFR to supplementary welfare funds or to the “
Treasury Fund” managed by INPS (national insurance institute for 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 booked 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). These plans expired on 3 May 2012.
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