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171
ANNUAL REPORT 2011
and any additional losses, except when the respective
minority interests have the obligation and capacity to
cover those losses. If the subsidiary reports profits in
later periods, the group appropriates those profits in
the amount necessary to recover the said minority
losses that had been absorbed by the group.
The purchase method is used to account the
acquisition of subsidiaries that occurred before
2010. The acquisition cost corresponds to the
fair value of the delivered goods, capital issued
instruments and liabilities incurred or assumed
on the acquisition date. The identifiable acquired
assets and the liabilities and contingent liabilities
taken into account in a corporate concentration
will initially correspond to the fair value on the
acquisition date, regardless of whether there are
non-controlling interests. The positive difference
between the acquisition cost and the fair value of
the group’s stake in the acquired and identifiable
net assets is recorded as a consolidation
difference. If the acquisition cost is less than
the fair value of the acquired subsidiary’s net
assets, the difference is recognised directly in
the consolidated statement of comprehensive
income (see Note 2.5).
For the acquisition of subsidiaries that occurred
after 1 January 2010 the Group has applied
revised IFRS 3. Accordingly to witch the purchase
method continues to be applied in acquisitions,
with some significant changes:
(i) All amounts which comprise the purchase
price are valued at fair value, with the option of
measuring, transaction by transaction, the “non-
controlled interests” by the proportion of the value
of net assets of the acquired entity or the fair value
of assets and liabilities acquired.
(ii) All costs associated with acquisition are recorded
as expenses.
Also has been applied since 1 January 2010 the
revised IAS 27, which requires that all transactions
with the “non- controlling interest” are recorded in
equity, when there is no change in control of the
entity, there is no place to record goodwill or gains
or losses. When there is a loss of control exercised
over the entity, any remaining interest on the
principal is remeasured at fair value, and a gain or
loss is recognized in the results of the exercise.
Balances and gains arising from transactions
between group companies are eliminated. Losses
not realised are also eliminated, except when the
transaction reveals that a transferred asset is
subject to impairment. The subsidiaries’ accounting
policies are altered whenever necessary to ensure
consistence with the group’s policies.
(b) Jointly controlled companies
The financial statements of jointly controlled
companies were included in these consolidated