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The accounting policies and standards adopted are the same as those used for preparing the consolidated financial statements,
to which reference should be made, except as described below.
Dividend income is recognised in the income statement when
the right to receive the dividends is established, normally
coinciding with the shareholders' resolution declaring the
same, irrespective of whether such dividends are paid out of
Stock options are valued on the basis of the difference
between grant date fair value and purchase price, and, in the
case of most subsidiary company employees, on the basis of
the difference between vesting date fair value and purchase
price. This value is recognised:
a) as an expense in the income statement, with a matching
credit to an equity reserve, for options vesting in favour of
the Company's employees;
b) if the related cost is recharged, the part relating to the
grant date fair value is recognised in equity, while the dif-
ference between the grant date fair value and the vesting
Investments in subsidiaries are carried at cost, less any impair-
ment losses.
If there is specific evidence of impairment, the value of
investments in subsidiaries, determined on the basis of cost,
is tested for impairment. This involves comparing the carrying
amount of investments with their recoverable amount, defined
as the higher of fair value, less costs to sell, and value in use.
The value of investments is tested for impairment in at least
one of the following circumstances:
• the carrying amount of the investment in the separate
financial statements exceeds the carrying amount in the
consolidated financial statements of the investee's net
assets, including any associated goodwill;
• the investee's reported EBITDA is less than 50% of the
same amount projected in the business plan, if this perfor-
mance indicator is relevant to the company in question;
B.
ACCOUNTING POLICIES
B.1 DIVIDENDS
B.2 SHARE-BASED PAYMENTS
B.3 INVESTMENTS IN SUBSIDIARIES
an investee company's pre- or post-acquisition earnings.
The distribution of dividends to shareholders is recognised
as a liability in the Company's financial statements when the
distribution of such dividends is approved.
date fair value is recognised as a dividend in the income
statement;
c) as an increase in the value of investments in subsidiaries,
with a matching credit to an equity reserve, for options
vesting in favour of employees of Group companies.
In all cases, the value is recognised on a straight-line basis
over the option vesting period; this recognition is based on
the estimated number of stock options that will effectively
vest in favour of eligible employees, taking into consideration
any vesting conditions that are not based on the market value
of the shares.
• the dividend distributed by the investee exceeds the total
comprehensive income of the investee in the period to
which the dividend refers.
If the recoverable amount of an investment is less than its
carrying amount, then the carrying amount is reduced to the
recoverable amount. This reduction represents an impairment
loss, which is recognised through the income statement.
For the purposes of impairment testing, the fair value of in-
vestments in listed companies is determined with reference to
market value, regardless of the size of holding. The fair value
of investments in unlisted companies is determined using
valuation techniques.
Value in use is determined using the "Discounted Cash Flow
- equity side" method: this involves calculating the present