IBERSOL Annual Report 2018

Consolidated Financial Statements 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. 2.5 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 cur- rency using the exchange rates on the transaction date. Exchange rate gains or losses from liquidating transactions and from the conversion rate on the consolidated state- ment 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 statements are translated into euro using the average exchange rate re- corded during the period. The resulting exchange difference is recorded in equity under the heading of exchange rate differences. “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 exchange rate at the balance sheet date. When a foreign entity is disposed, the accumulated exchange rate difference is rec- ognised in the income statement as a gain or loss on disposal. Currency exchange rate used for conversion of transactions and balances denomi- nated in Kwanzas in 31 December, 2018 and 2017 were respectively: 218