TomTom 2008 Annual Report Download - page 50

48 / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF TOMTOM NV
1. GENERAL
TomTom NV (the “company”) has its statutory seat and headquarters in Amsterdam, the Netherlands. The
activities of the company include the development and sale of navigation solutions and digital maps. The primary
focus of these activities is on personal navigation.
The consolidated Financial Statements of the company for the year ended 31 December 2008 comprise the
company and its subsidiaries (together referred to as “the Group”).
The Financial Statements have been prepared by the Board of Management and authorised for issue on
23 February 2009. They will be submitted for approval to the Annual General Meeting of Shareholders
on 28 April 2009.
In accordance with section 402 of Part 9 of Book 2 of the Netherlands Civil Code, a condensed income statement
is included in the company Financial Statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated Financial Statements are set
out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
The consolidated Financial Statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the EU.
The Financial Statements have been prepared on the historical cost basis, except for derivatives and financial
instruments classified as held for trading or available for sale, which are stated at fair value.
Unless otherwise indicated, assets and liabilities are carried at their nominal value. Income and expenses are
accounted for on an accrual basis.
Use of estimates
The preparation of these Financial Statements requires that the Group makes assumptions, estimates and
judgements that affect the reported amounts of assets, liabilities and disclosure of contingent assets and
liabilities as of the date of the consolidated Financial Statements and the reported amounts of revenues and
expenses during the reporting period. Actual results may differ from those estimates. Estimates are used when
accounting for items and matters such as revenue recognition, allowances for uncollectible accounts receivable,
inventory obsolescence, product warranty costs, depreciation and amortisation, asset valuations, impairment
assessments, taxes, earn-out provisions, other provisions, stock-based compensation and contingencies. The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of
revision and the future periods if the revision affects both current and future periods. The principal accounting
policies adopted are set out below.
Adoption of new and revised standards
Standards and Interpretations effective in the current period that have been adopted by the Group:
• IFRIC 14 “ The limit on a defined benefit asset”
• IFRIC 11 “Group and Treasury share transactions”
• IAS 39 & IFRS 7 “Amendments to IAS 39 & IFRS 7”
All other Standards and Interpretations that were in issue but not yet effective for reporting periods beginning on
1 January 2008 have not yet been adopted. The Group anticipates that the adoption of these Standards and
Interpretations will have no material impact on the Financial Statements of the Group in future periods.
Basis of consolidation
The consolidated Financial Statements incorporate the Financial Statements of the company and entities
controlled by the company (its subsidiaries). Control is achieved where the company has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired during the year are included in the Consolidated Income Statement from the
effective date of acquisition.