Experian 2008 Annual Report Download - page 73

71Experian Annual Report 2008
Introduction 2 – 5
Business review 6 – 37
Governance 38 – 64
Financial statements Group financial statements Financial statements Group financial statements
2. Basis of preparation and significant accounting policies (continued)
The adoption of IFRIC 8 ‘Scope of IFRS 2’, IFRIC 9 ‘Re-assessment of embedded derivatives’, IFRIC 10 ‘Interim financial
reporting and impairment’ and IFRIC 11 ‘IFRS 2 – Group and treasury share transactions’ which became effective during the
year has had no material effect on the results and net assets of the Group.
Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to both years presented, unless otherwise stated.
Basis of consolidation
Subsidiaries
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They cease to be consolidated
from the date that the Group no longer has control. As required by IFRS 3 all business combinations are accounted for using
the purchase method.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.
Accounting policies of subsidiaries are consistent with the policies adopted by the Group for the purposes of the Group’s
consolidation. The Group financial statements incorporate the financial statements of the Company and its subsidiary
undertakings for the financial year ended 31 March 2008.
A list of the principal subsidiaries is given in note Q to the parent company financial statements.
Equity minority interests
The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group.
Disposals to minority interests result in gains and losses for the Group that are recorded in the Group income statement.
Purchases from minority interests result in goodwill, being the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary.
Associates
Associates are entities over which the Group has significant influence but not control, generally achieved by a shareholding
of between 20% and 50% of the voting rights. The equity method is used to account for investments in associates and
investments are initially recognised at cost.
The Group’s share of net assets of its associates and loans made to associates are included in the Group balance sheet. The
Group’s share of its associates’ post-acquisition after tax profits or losses is recognised in the Group income statement,
and its share of post-acquisition movements in equity is recognised in the Group’s equity. The cumulative post-acquisition
movements are adjusted against the carrying amount of the investment. The carrying amount of an investment in an associate
is tested for impairment by comparing its recoverable amount to its carrying amount whenever there is an indication that the
investment may be impaired.
Revenue recognition
Revenue represents the fair value of the sale of goods and services to external customers, net of value added tax and other
sales taxes, rebates and discounts, including the provision and processing of data, subscriptions to services, software and
database customisation and development and the sale of software licences, maintenance and related consulting services.
Revenue in respect of the provision and processing of data is recognised in the year in which the service is provided.
Subscription revenues, and revenues in respect of services to be provided by an indeterminate number of acts over a specified
period of time, are recognised on a straight line basis over those periods. Customisation, development and consulting revenues
are recognised by reference to the stage of completion of the work. Revenue from software licences is recognised upon delivery.
Revenue from maintenance agreements is recognised on a straight line basis over the term of the maintenance period.
Where a single arrangement comprises a number of individual elements which are capable of operating independently of
one another, the total revenues are allocated amongst the individual elements based on an estimate of the fair value of each
element. Where the elements are not capable of operating independently, or reasonable measures of fair value for each
element are not available, total revenues are recognised on a straight line basis over the contract period.
Foreign currency translation
Presentation currency
The Group’s financial statements are presented in US Dollars.