101 / 140
19
4.10 Provisions and contingencies
When preparing the financial statements the Company's directors made a distinction between:
-
Provisions: credit balances covering present obligations arising from past events with
respect to which it is probable that an outflow of resources embodying economic benefits that is
uncertain as to its amount and/or timing will be required to settle the obligations; and
-
Contingent liabilities: possible obligations that arise from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of one or more future events not
wholly within the Company's control.
The financial statements include all the provisions with respect to which it is considered that it is
more likely than not that the obligation will have to be settled. Contingent liabilities are not
recognised in the financial statements, but rather are disclosed, unless the possibility of an outflow
in settlement is considered to be remote.
Provisions are measured at the present value of the best possible estimate of the amount required
to settle or transfer the obligation, taking into account the information available on the event and
its consequences. Where discounting is used, adjustments made to provisions are recognised as
interest cost on an accrual basis.
The compensation to be received from a third party on settlement of the obligation is recognised
as an asset, provided that there are no doubts that the reimbursement will take place, unless
there is a legal relationship whereby a portion of the risk has been externalised as a result of
which the Company is not liable; in this situation, the compensation will be taken into account for
the purpose of estimating the amount of the related provision that should be recognised.
4.11 Termination benefits
Under current legislation, the Company is required to pay termination benefits to employees
terminated under certain conditions. Therefore, termination benefits that can be reasonably
quantified are recognised as an expense in the year in which the decision to terminate the
employment relationship is taken. The accompanying financial statements do not include any
provision in this connection, since no situations of this nature are expected to arise.
4.12 Environmental assets and liabilities
Environmental assets are deemed to be assets used on a lasting basis in the Company's operations
whose main purpose is to minimise environmental impact and protect and improve the
environment, including the reduction or elimination of future pollution.
In view of the business activities carried on by the Company, it does not have any environmental
liability, expenses, assets, provisions or contingencies that might be material with respect to its
equity, financial position or results. Therefore, no specific disclosures relating to environmental
issues are included in these notes to the financial statements.
4.13 Business combinations
Business combinations are accounted for by applying the acquisition method, for which the
acquisition date is determined and the cost of the combination is calculated, and the identifiable
assets acquired and the liabilities assumed are measured at their acquisition-date fair value.
Goodwill or gains from a bargain purchase arising from a combination are calculated as the
difference between the acquisition-date fair value of the assets acquired and liabilities assumed
and the cost of the business combination at the acquisition date.
The cost of a business combination is the aggregate of:
-
The acquisition-date fair value of the assets acquired, the liabilities assumed and the
equity instruments issued.