IBERSOL Annual Report and Consolidated Accounts 2017

ANNUAL REPORT 2017 The segments’ assets include, in particular, tangible fixed assets, intangible assets, stocks, accounts receivable and cash and cash equivalents. This category excludes deferred taxes, financial investments and derivatives held for negotiation or hedge. The segments’ liabilities are operating liabilities. Taxes, loans and related hedging derivatives are excluded. Investments include additions to tangible fixed assets (Note 8) and intangible assets (Note 9). Investments are distributed according to this business distribution. 2.4 CURRENCY EXCHANGE RATE (a) Working currency and financial statement currency The Financial Statements of each group entity are prepared using the currency of the region in which the entity operates (“the working currency”). The consolidated financial statements are presented in euros since this is the working currency which the group uses in the financial statements. (b) Transactions and balances Transactions in currencies other than the euro are converted into the working currency using the exchange rates on the transaction date. Exchange rate gains or losses from liquidating transactions and from the conversion rate on the consolidated statement of financial position date of monetary assets and liabilities in a currency other than the euro are recognised in the Profit and Loss Account, except when they are qualified as cash flow hedging or as net investment hedging, in which case they are recorded in equity. (c)Financial statements Financial statements assets and liabilities of foreign entities are converted to euro using the exchange rates at the balance sheet date, profit and loss as well as the cash flows state- ments are translated into euro using the average exchange rate recorded during the period. The resulting exchange difference is recorded in equity under the heading of exchange rate differences. 211