Tiscali 2001 Annual Report Download - page 72

64
which corresponds to third parties' participations is shown in an account called "Profit
(loss) of the financial period pertaining to third parties".
5) TRANSLATION OF FINANCIAL STATEMENTS LISTED IN FOREIGN
CURRENCY
The items of the Balance Sheet listed in extra-EU currency are converted into EUR using
the conversion rate valid at the end of the financial year, while those of the Profit and Loss
Statement are converted into EUR using the average exchange rates over the financial
year. The difference between the financial year results calculated using conversion with
the average exchange rates and the results obtained with the year-end exchange rates and
the effects on assets and liabilities of the fluctuations in exchange rates between the
beginning and end of the financial year are shown under shareholders' equity in the
account "Currency translation reserve". Detailed information on currencies utilised in the
preparation of the Consolidated Financial Statements is to be found in the attachment.
6) VALUATION CRITERIA
a) General criteria
Accounting principles and valuation criteria have been applied in a uniform manner
to all consolidated Companies. The valuation criteria adopted in the consolidated
financial statements are the same as those used by the Parent Company Tiscali SpA;
they conform to the above mentioned applicable legislation. Such criteria have been
integrated and interpreted by the accounting principles issued by the Italian
Chartered Accountants Association (Consiglio Nazionale dei Dottori Commercialisti e
dei Ragionieri). The criteria used during the financial year referenced herein do not
vary from those applied for the preparation of the financial statements for the
preceding year, in particular with regard to valuation principles and the continuity of
the same. Balance sheet items have been valued based on general criteria of caution
and competency, in the perspective of future continuation of activity. For the
purposes of the accounting entries, prevalence is given to the economic substance
of the transactions rather than to their legal form. Investments are entered in the
accounts at the time of their payment. Profits are included only if they accrued by
the closing date of the financial year, whereas risks and losses are taken into
account even if they became known at a later date. Miscellaneous items grouped
under single accounts of the financial statements have also been valued separately.
Durable assets have been classified as non-current assets.
b) Valuation adjustments and recoveries of value
The values of fixed and intangible assets whose useful life is limited over time are
written down respectively through depreciation and amortization charges. The same
fixed and intangible assets and the other assets are written down each time a
durable loss of value is noted; the original value is re-established insofar as the