Tiscali 2008 Annual Report Download - page 67

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CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
are structured and defined by geographic area, which therefore
represents the primary segment for the purposes of information
by business sector, as required by IFRS 8. The geographic
areas are represented in particular by:
•Italy
•UK
•Corporate and other business: minor Italian companies
and corporate activities.
Lines of business (Access, Voice, Business services / Business,
Media) represent the secondary reporting segment, at sector
information level.
Assets held for sale and discontinued operations
Non-current assets and/or groups of assets undergoing disposal
(‘Assets held for sale and Discontinued operations’), as required
by IFRS 5, were classified under a specific item in the balance
sheet and are assessed at the lower between the asset’s
previous book value and market value, net of any sales costs,
until the disposal of the assets themselves.
The assets are thus classified if it is estimated that their book
value will be recovered by disposal rather than by the
performance of the Company’s normal activities. This condition
is observed only when the sale is highly probable, the asset is
available for immediate sale in its present condition and the
Board of Directors of the parent company is committed to the
sale, completion of which should be expected within one year
from the date of classification.
After the sale, the residual values were reclassified in the various
balance sheet items.
Revenues and costs relating to assets held for sale and/or
discontinued activities are reflected in the item ‘Result from
assets disposed of and/or destined to be disposed of’
(‘discontinued operations’), if the following conditions
established by IFRS 5 referring to these activities apply:
a) they represent an important independent line of business
or geographic business area;
b) they are part of a single co-ordinated plan to dispose of
an independent major line of business or geographic
business area;
c) they involve subsidiaries originally acquired exclusively
with a view to resale.
The income statement item entitled ‘Results from assets
disposed of and/or destined to be disposed of’ contains the
following, in a single item and net of the related taxation:
•the period result achieved by subsidiaries held for sale,
including any adjustment of net assets to fair value;
•the result of the ‘discontinued’ operations, including the
period result achieved by subsidiaries up to the date of
transfer of control to third parties, together with gains
and/or losses deriving from disposal.
Analysis of the composition of the overall results deriving from
the assets concerned is indicated in the explanatory notes.
Seasonal nature of the revenues
Tiscali’s activities are not affected to a significant extent by
phenomena linked to the seasonal nature of the business. Such
phenomena essentially linked to the trend in revenues, mainly
occur in the third quarter of the year, at the same time as the
Summer vacation period.
Basis of consolidation
The consolidation area includes the parent company Tiscali S.p.A.
and the companies over which Tiscali – either directly or indirectly
– has the power to govern the financial and operating policies so
as to obtain economic benefits from their activities. In the specific
circumstances relating to Tiscali, control involves the majority of
voting rights exercisable at ordinary shareholders’ meetings of
the companies included in the consolidation area.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group and are de-consolidated
from the date on which control ceases.
When preparing the consolidated financial statements, the
assets, liabilities, costs and revenues of the consolidated
companies are consolidated line-by-line for their entire amount,
allocating the minority shareholders the portion of equity and
results for the year due to them in the specific balance sheet
and income statement items. The book value of the equity
investment in each of the subsidiaries is eliminated against
the corresponding portion of shareholders’ equity of each of
the subsidiaries inclusive of any adjustments at fair value as
of the acquisition date; the positive difference emerging is
recorded as goodwill under intangible assets, as illustrated
further on, while the negative difference (negative goodwill) is
recorded in the income statement.
All significant intra-company transactions within the Group and
the relevant balances are eliminated on consolidation, as are
unrealised gains and losses on intra-group operations.
Minority interests and net profit attributable to minority shareholders