TomTom 2005 Annual Report Download - page 62
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Businesscombinations
Theacquisitionofsubsidiariesisaccountedforusingthe
purchasemethod.Thecostoftheacquisitionis
measuredattheaggregateofthefairvalues,atthedate
ofexchange,ofassetsgiven,liabilitiesincurredor
assumed,andequityinstrumentsissuedbytheGroup
inexchangeforcontroloftheacquiree,plusanycosts
directlyattributabletothebusinesscombination.The
acquiree’sidentifiableassets,liabilitiesandcontingent
liabilitiesthatmeettheconditionsforrecognitionunder
IFRS3“BusinessCombinations”arerecognisedattheir
fairvaluesattheacquisitiondate.
Earnoutprovision
Theprovisionforearn-outsrelatestoprevious
acquisitionswherepartofthepurchaseconsiderationisa
futureearnoutfortheformershareholdersofacquired
companies.TheCompanyprovidesforfuturecosts
relatedtotheseearn-outs.
Revenuerecognition
Revenueismeasuredasthefairvalueofthe
considerationreceivedorreceivableandrepresents
amountsreceivableforgoodsandservicesprovidedin
thenormalcourseofbusiness.Revenueonthesaleof
goodsisonlyrecognisedwhentherisksandrewardsof
ownershipofgoodsaretransferredtotheCompany’s
customers(whichincludedistributors,retailers,end-
usersandOriginalEquipmentManufacturers(“OEMs”)).
Therisksandrewardsofownershiparetransferred
whenthegoodsareshippedandwhencustomershave
nocontractualrightsofreturn.Whenreturnsare
probable,anestimateismadebaseduponhistorical
ratesofreturnsandrecordedasadirectdeductionfrom
revenue.Revenueisrecordednetofsalestaxes,
performance-basedrebatesandproductreturns.
TheConsolidatedFinancialStatementsfor2005includethefinancialstatementsofTomTomNVandthe
followingsubsidiaries:
Countryof
incorporationand Placeof Proportionof
Subsidiaryname residence residence ownershipinterest
TomTomInternationalBV NL Amsterdam 100%
TomTomSalesBV NL Amsterdam 100%
TomTomInc. US Concord,MA 100%
TomTomSoftwareLtd. UK London 100%
TomTomAsiaLtd. TA Taipei 100%
DrivetechInc. TA Taipei 100%
DatafactoryAG DE Leipzig 100%