IBERSOL | 2019 Annual Report

Consolidated Financial Statements (c) Associates Associates are entities over which the Company has between 20% and 50% of the voting rights, or over which the Company has significant influence, but which cannot exercise its control. Investments in associates are stated at cost. Associates were included in these con- solidated financial statements by the equity method. Dividends attributed by subsi- diaries and associates are considered in financial results. Financial investments in associates are subject to impairment tests whenever there are signs of impairment. An impairment loss is recognized in the income statement by the amount of the excess of the asset’s carrying amount over its recoverable amount. The recoverable amount is the highest of an asset’s fair value less the costs inherent in its sale and its value in use. To perform impairment tests, each participa- tion is analyzed separately. Impairment losses on financial investments in associates are reversible. The entities that qualify as associates are listed in note 5. 2.4 Report per segment An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity) whose operating results are reviewed regularly by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which separa- te financial information is available The group’s head office – which also hosts the largest operating company, is in Portugal. Its business activity is in the restaurant segment. The Group operates in three main business segments: - Restaurants, which includes the units with table service available offer and home delivery; - Counters, with sales over the counter; - Concessions and catering, which includes all other businesses, including the catering ac- tivity and the units located in concession areas. 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. 218