Tiscali 2013 Annual Report Download - page 68

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
-
Annual Report as at 31
December 2013
68
Seasonal nature of revenues
Tiscali’s activities are not affected to a significant extent by events linked to the seasonal nature of
business.
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 the entire amount, allocating the portion of
equity and results for the year due to minority shareholders 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 the 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 are classified separately from the
Group’s equity and results, on the basis of the percentage of net Group assets they possess.
If the losses attributable to the minority shareholders of a consolidated subsidiary are greater than the
shareholders’ equity pertaining to the minority shareholders of the subsidiary, the excess and any
other loss attributable to the minority shareholders is allocated to the shareholders’ equity pertaining to
the shareholders of the parent company unless the minority shareholders are subject to binding
obligations and they are able to make further investments so as to cover the losses.
If, subsequently, the subsidiary reports profits, the profits attributable to the minority shareholders are
attributable to the shareholders’ equity pertaining to the parent company’s shareholders until the
portion of the losses of the minority shareholders, previously covered by the parent company’s
shareholders, have been recovered.
Equity investments in associated companies, as well as those subject to joint control, are reflected in
the consolidated financial statements among non-current assets and carried at equity, as envisaged,
respectively, by IAS 28 (Investments in associates) and by IAS 31 (Investments in joint ventures).
Associated companies are those over which the Group has significant influence, i.e. the power to
participate in the financial and operating policy decisions of the investee, but without control or joint
control however. Under the equity method, equity investments in associates are initially booked to the
balance sheet at acquisition cost, as adjusted for post-acquisition changes in the shareholders’ equity
of the associate companies, less any impairment in the value of individual equity investments. Any
excess of the cost of acquisition over the Group’s share of the net fair value of identifiable assets,
liabilities and contingent liabilities of the associate at the date of acquisition is recognised as goodwill.
The goodwill is included in the book value of the investment and is subject to impairment testing. Any
excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of acquisition of the associate at the date of acquisition is booked to the income
statement in the financial year of acquisition. The consolidated financial statements include the