1. SIGNIFICANT ACCOUNTING POLICIES continued
1.3 Basis of Consolidation continued
1.3.3 Business Combinations continued
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the terms for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to
reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would
have affected the amounts recognised at that date.
1.4 Foreign Currency
The functional currency of the Company and the Group, as well as the presentational currency of the Group, is the Euro.
1.4.1 Foreign Currency Transactions
Transactions in foreign currencies are translated to the Euro at the foreign exchange rates ruling at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting balance sheet date are
translated to the Euro at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation
are recognised in the consolidated income statement. Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
On consolidation the assets and liabilities of the Group's overseas operations are translated at exchange rates prevailing at
the period end date. Income and expense items are translated at the average exchange rates for the period unless exchange
rates fluctuate significantly, in which case the spot rate for significant items is used. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income
or as expenses in the period in which the operation is disposed of.
1.5 Property, Plant and Equipment
1.5.1 Owned Assets
Property, plant and equipment is stated at cost, less accumulated depreciation (see 1.5.2 below) and impairment losses
(see accounting policy 1.7). Where parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items of property, plant and equipment.
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an
item of property, plant and equipment. The estimated useful lives are as follows:
Fixtures and fittings: 3 years
Plant and equipment: 3 years
The residual value, if significant, is reassessed annually.
1.6 Intangible Assets
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business
less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill has been allocated to each of the Group's cash-generating units that is
expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its
carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment
loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
ANNUAL REPORT 2013 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended 31 December 2013