Consolidation procedures

Investments in consolidated companies

Assets, liabilities, expense and income of companies consolidated on a global line-by-line basis are recognised in the consolidated financial statements. The carrying amount of investments is offset against the share of equity of investees. The equity of investees is determined by allocating their current value on the acquisition date to individual assets and liabilities. Any residual difference compared with the acquisition cost, if positive, is recorded as an asset under "Goodwill"; if negative, it is recorded in the income statement.

Business combinations whereby the companies concerned are ultimately controlled by the same company or companies either before or after the combination, and such control is not temporary, are classified as transactions “under common control”.

These operations are not governed by either IFRS 3 or other IFRSs. In the absence of a benchmark accounting standard, the choice of accounting standard for the transaction in question – for which significant influence on future cash flows cannot be proven – is based on the prudence concept, entailing the application of the continuity criterion of net asset values. Assets are measured at their book value according to the accounting records of the company acquired prior to the transaction or other values shown in the consolidated financial statements of the common parent, where available. Where the transfer values are higher than these historical values, the surplus is eliminated by adjusting the equity of the acquiring entity.

The portion of equity and profit attributable to minorities is recorded under a special heading; the portion of equity attributable to minorities is determined based on the current values assigned to the assets and liabilities on the date of acquisition of control, excluding any goodwill associated therewith.

Gains and losses arising on the disposal of equity interests in consolidated companies are taken to the income statement based on the amount of the difference between the selling price and the corresponding share of equity transferred. The financial closing of all consolidated companies is
31 December.

Intragroup transactions

Profits on transactions between consolidated companies not yet realised with third parties are derecognised, as are intragroup receivables, payables, income and expense, guarantees, commitments and risks.

Intragroup losses are not eliminated as they are considered representative of the reduced value of the asset sold.