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3.
Accountingpolicies
The principal accounting policies used in preparing the Group's consolidated financial
statements, in accordancewith EU-IFRSs, were as follows:
a)
Goodwill on consolidation
Goodwill arising on consolidation represents the excess of the cost of acquisition, plus the
non-controlling interests and fair value of any previous investment in the acquiree, over
the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary
at the date of acquisition.
The assets and liabilities acquired are measured provisionally at the date on which control
of the company is obtained, and the resulting value is reviewed within a maximum period
of one year from the acquisition date until the fair value of the assets and liabilities has
been calculated definitively. Any difference between the acquisition cost and the fair value
of the assets and liabilities acquiredwill be temporarily recognised as goodwill.
Goodwill acquired on or after 1 January 2004 is measured at acquisition cost and that
acquired earlier is recognised at the carrying amount at 31 December 2003. In both cases,
at the end of each reporting period goodwill is reviewed for impairment (i.e. a reduction in
its recoverable amount to below its carrying amount) and, if there is any impairment, the
goodwill is written downwith a charge to “Impairment and Gains or Losses on Disposals of
Non-Current Assets” in the accompanying consolidated income statement.
An impairment loss recognised for goodwill must not be reversed in a subsequent period.
b)
Business combinations
Business combinations are accounted for using the acquisitionmethod.
The application of the acquisition method requires, as indicated in IFRS 3, Business
Combinations, at the acquisition date, the recognition and fair value measurement of the
identifiable assets acquired, the liabilities assumed and any non-controlling interest in the
acquiree, and the recognition and measurement of a gain from a bargain purchase made
on very favourable terms.
The acquirer shall identify the acquisition date, which is the date on which it obtains
control of the acquiree.
The cost of a business combination is the sum of the acquisition-date fair value of the
consideration transferred, and the amount of any non-controlling interests in the acquiree.
For each business combination, the acquirer shall measure any non-controlling interest in
the acquiree either at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s identifiable net assets.
The costs incurred to issue equity or debt securities given up in exchange for the items
acquired are not included in the cost of a business combination.
Also, the cost of a business combination does not include the fees paid to legal advisers
and other professionals involved in the combination, or any costs incurred internally in this
connection. Such amounts are charged directly to the Group's consolidated profit or loss.
