IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 pean Union as of 1 January 2020. Regarding Group companies that use different accounting standards, conversion adjustments were made to IFRS. The consolidated financial statements have been prepared in accordance with the historical cost principle, changed to fair value in the case of derivative financial in- struments. The preparation of these financial statements requires Management to perform es- timates and judgments, as disclosed in Note 4. Change in headings presented in the Consolidated Cash Flow Statement As at 31 December 2020, Ibersol Group individualized the effect of the payment of interest and financial debt associated with the lease contracts, having started to present the interest component in the “Interest and similar costs” line. The Ibersol Group also decided to autonomize the effect of exchange rate differences. For purposes of comparability, these changes were also made in the previous pe- riod. 2.2. NEW RULES, CHANGES AND INTERPRETATIONS 2.2.1. Accounting standards and interpretations recently issued, which came into force and which the Group applied in the preparation of these financial state- ments, are as follows: a) Changes to references to the conceptual structure in IFRS standards In March 2018, IASB issued a comprehensive set of concepts for financial reporting, the revised Conceptual Framework for financial reporting (Conceptual Framework), which aims to update, in existing standards, the references and citations of the existing version of the Conceptual Framework or the which was replaced in 2010, replacing them with references to the revised Conceptual Framework. The revised Conceptual Framework has an effective adoption date for periods be- ginning 1 January 2020 for companies that use the Conceptual Framework to de- velop accounting policies when no IFRS standard applies to a specific transaction. The adoption of this standard did not impact the Group’s financial statements. b) Definition of Materiality (changes to IAS 1 and IAS 8) On 31 October 2018, IASB issued amendments to its definition of materiality to fa- cilitate companies in making materiality judgments. The amendments consist of (a) replacing the term “can influence” with “can reason- ably be expected to influence”; (b) include the concept of “concealment” together with the concepts of “omission” and “distortion” of information in the definition of materiality; (c) clarify that the “users” referred to are the main users of the general financial statements referred to in the Conceptual Framework, and (d) align the definition of materiality among the IFRS publications. The amended definition of materiality therefore states that “Information is material if it can be reasonably considered that its omission, distortion or concealment may 311