IBERSOL | Annual Report 2021

CONSOLIDATED FINANCIAL STATEMENTS • constitution of a provision for onerous contract, at Gran Canaria airport, in other operating costs, in the amount of 1.6 million euros. 2. MAIN ACCOUNTING POLICIES The main accounting policies adopted in the preparation of these consolidated fi- nancial statements are described below. These policies have been applied consist- ently in comparative periods. 2.1 PRESENTATION AND CONSOLIDATION BASIS, AND MAIN ACCOUNTING POLICIES These consolidated financial statements were prepared according to the Interna- tional Financial Reporting Standards (IFRS) issued by the International Account- ing Standards Board (IASB) and in accordance with interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) or the previous Standards Interpretation Committee (SIC), as adopted and effective by the Euro- pean Union as of 1st January 2021. 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 esti- mates and judgments, as disclosed in Note 4. 2.2. NEW RULES, CHANGES AND INTERPRETATIONS 2.2.1. The following standards, interpretations, amendments and revisions have been approved (“endorsed”) by the European Union and are mandatory for finan- cial years beginning on or after 1st January 2021: a) Covid-19 - Rent concessions Amendment to IFRS 16 In May 2020, the IASB issued “Covid-19 – Rent concessions”, which amended IFRS 16 Leases. If certain conditions are met, the amendment allows tenants, as a practical expedient, not to assess whether certain Covid-19 related rent concessions are lease modifications. Instead, lessees who apply the practical expedient must account for these lease concessions as if they were not lease modifications, so that, for example, the amount of lease forgiven on or before June 30th, 2021 is recognized in profit or loss. in the same year the concession is granted, rather than being allocated over the duration of the contract, as would be the case if the practical expedient were not permitted. The change applied for annual periods beginning on or after June 1st, 2020. In 2021, the IASB has extended the practical expedient by 12 months - i.e. allowing lessees to apply it to rent concessions for which any reduction in lease payments affects only payments originally due on or before June 30th, 2022. The 2021 changes are effective for annual reporting periods beginning on or after April 1st, 2021. Renters may apply early. 336