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Annual Report & Accounts 2014 - NOTES
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1. siGnificant accountinG policies continued 1.3 Basis of consolidation continued 1.3.3 Business combinations continued the subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with iAs 39, as appropriate, with the corresponding gain or loss being recognised in profit or loss. When a business combination is achieved in stages, the group's previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of. 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, as well as the presentational currency of the group, is the euro. 1.4.1 Foreign currency 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. 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 recognised in other comprehensive income classified as equity and transferred to the group's translation reserve. such translation differences are reclassified to profit or loss 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. 1.5.2 Depreciation 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 1.6.1 goodwill 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. ANNUAL REPORT 2014 30 notes to the consolidated financial statements continued for the year ended 31 december 2014