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The fair value of any contingent consideration that depends on future events or on the
fulfilment of certain pre-determined conditions.
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, since 1 January 2010 the cost of a business combination does not include the fees paid to
legal advisers and other professionals involved in the combination or, clearly, any costs incurred
internally in this connection. Such amounts are charged directly to profit or loss.
If, exceptionally, a gain from a bargain purchase arises from the business combination, it is
recognised as income in the statement of profit or loss.
When the fair value of intangible assets cannot be determined by reference to an active market,
Recognition and Measurement Standard no.19 of the Spanish National Chart of Accounts, as
drafted by Royal Decree 1159/2010, limits the recognition thereof up to the amount in which the
value of the net assets acquired is equal to the cost of the business combination.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the acquirer shall report in its financial statements provisional
amounts for the items for which the accounting is incomplete, and the provisional amounts may be
adjusted in the period required to obtain the necessary information. However, the measurement
period shall not exceed one year from the acquisition date. The effects of the adjustments made in
that period are recognised retrospectively and comparative information for prior periods must be
revised as needed.
Subsequent changes in the fair value of the contingent consideration are recognised in profit or
loss, unless the consideration has been classified as equity, in which case subsequent changes in
its fair value are not recognised.
4.14 Related party transactions
The Company performs all its transactions with related parties on an arm's length basis. Also, the
transfer prices are adequately supported and, therefore, the Company's directors consider that
there are no material risks in this connection that might give rise to significant liabilities in the
future.
4.15 Non-current assets and disposal groups classified as held for sale
The Company classifies a non-current asset or disposal group as held for sale when the decision to
sell it has been taken and the sale is expected to occur within twelve months.
These assets or disposal groups are measured at the lower of their carrying amount and fair value
less costs to sell.
Non-current assets classified as held for sale are not depreciated, but rather at the end of each
reporting period the related valuation adjustments are made to ensure that the carrying amount is
not higher than fair value less costs to sell.
Income and expenses arising from non-current assets and disposal groups classified as held for
sale which do not qualify for classification as discontinued operations are recognised under the
related heading in the statement of profit or loss on the basis of their nature.
4.16 Current and non-current items
Current assets are assets associated with the normal operating cycle, which in general is
considered to be one year; other assets which are expected to mature, be disposed of or be
realised within twelve months from the end of the reporting period, financial assets held for
trading, except for financial derivatives that will be settled in a period exceeding one year; and
cash and cash equivalents. Assets that do not meet these requirements are classified as non-
current assets.