IBERSOL Annual Report and Consolidated Accounts 2017

Consolidated Financial Statements “Goodwill” and fair value adjustments arising from the acquisition of foreign entities are treated as assets and liabilities of that entity and translated into euro according to the ex- change rate at the balance sheet date. When a foreign entity is disposed, the accumulated exchange rate difference is recognised in the income statement as a gain or loss on disposal. Currency exchange rate used for conversion of transactions and balances denominated in Kwanzas in 31 December, 2017 and 2016 were respectively: Dec. 2017 Euro exchange rates (x foreign currency per 1 Euro) Rate on December, 31 2017 Average interest rate year 2017 Kwanza de Angola (AOA) 185,391 187,441 Dec. 2016 Euro exchange rates (x foreign currency per 1 Euro) Rate on December, 31 2016 Average interest rate year 2016 Kwanza de Angola (AOA) 184,468 181,554 2.5 TANGIBLE FIXED ASSETS Buildings and other structures include own properties assigned to the restaurant activities and expenses on works at third-party properties, in particular those required for setting up restau- rant shops. Tangible fixed assets are shown at the acquisition cost, net of the respective amortisation and accumulated impairment losses. The historic cost includes all expenses attributable directly to the acquisition of goods. Costs with loans incurred and with loans obtained for the construction of fixed tangible assets are recognized as part of the construction cost of the asset. Subsequent costs are added to the amounts for which the good is recorded or recognised as separate assets, as appropriate, only when it is probable that the company will obtain the under- lying economic benefits and the cost may be reliably measured. Other expenses on repairs and maintenance are recognised as an expense in the period in which they are incurred. Depreciation of assets is calculated by the equal annual amounts method in order to allocate its cost at its residual value, according to its estimated lifetime, as follows: 212