Tiscali 2013 Annual Report Download - page 74

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
-
Annual Report as at 31
December 2013
74
determined had no impairment been recognised for the asset in previous years. An impairment
reversal is booked to the income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value. Considering the circumstances and
characteristics of the Group’s assets, the cost refers to direct materials. The cost is calculated by using
the average cost method. The net realisable value is the selling price less the costs considered
necessary for achieving the sale.
Financial instruments
Loans and receivables
Group receivables are stated in the items “other non-current financial assets”, “receivables from
customers”, “other receivables and other current assets” and “other current financial assets”, and
include guarantee deposits, trade receivables, and receivables from third parties generated as part of
core business activities.
If they have a fixed maturity, they are stated at amortised cost, using the effective interest rate method.
When financial assets have no fixed expiry, they are estimated at the acquisition cost. Receivables
maturing beyond 12 months, unprofitable receivables, and receivables accruing interest at lower rates
with respect to the market, are updated by using market rates.
Estimates are regularly carried out with the aim of making sure whether there is objective evidence
that a financial asset or a group of assets have been subject to impairment. If there is objective
evidence, the impairment must be recorded as a cost in the income statement for the period.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, on-demand and short-term deposits, in the latter
case with an original maturity envisaged of no more than three months.
Payables and financial liabilities
The Group’s payables and financial liabilities are stated in the items “bonds”, “payables to banks and
other lenders”, “payables for finance leases”, “other non-current liabilities”, “payables to suppliers”, and
include trade payables, payables to third parties, financial payables, inclusive of payables for loans
received for advances on the factoring of receivables and for financial lease transactions.
Trade payables and other payables are stated at face value. Financial payables are initially stated at
cost, equating to the fair value of the amount received, net of related charges. Subsequently, these
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.