IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 and IFRS Practice Statement 2), “Changes to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates” Their impact is still being assessed by the Group. 2.3 CONSOLIDATION (a) Controlled companies Financial investments in companies in which the Group is exposed or has rights, to variable returns, as a result of its involvement in these companies, and has the ability to influence those returns, through the power over these companies (defini- tion of control used by the Group) , were included in these consolidated financial statements through the full consolidation method. The equity and net income of these companies, corresponding to the participation of third parties, is presented separately in the consolidated statement of financial position and statement of com- prehensive income, under the heading non-controlling interests. The companies in- cluded in the financial statements are detailed in Note 5. When the losses attributable to the non-controlling interests exceed the minority interest in the subsidiary’s equity, the non-controlling interests absorb this excess, in the% held. The assets and liabilities of each Group company are identified at their fair value on the acquisition date as provided for in IFRS 3. Any excess of the acquisition cost over the fair value of the net assets and liabilities acquired is recognized as goodwill. If the difference between the acquisition cost and the fair value of the net assets and liabilities acquired is negative, it is recognized as an income for the period. Transaction costs directly attributable to business combinations are immediately recognized in profit or loss. Non-controlling interests include the proportion of third parties in the fair value of identifiable assets and liabilities at the date of acquisition of the subsidiaries. Subsequent transactions for the sale or acquisition of interests to non-controlling interests, which do not imply a change in control, do not result in the recognition of gains, losses or goodwill, with any difference determined between the value of the transaction and the book value of the transaction, recognized in Equity, in other equity instruments. Balances and gains arising from transactions between group companies are elimi- nated. Unrealized losses are also eliminated, unless the transaction reveals evidence of impairment of a transferred asset. The accounting policies of the subsidiaries are changed, whenever necessary, in order to ensure consistency with the policies adopted by the Group. 317