IBERSOL | Annual Report 2021

ANNUAL REPORT 2021 sioning provisions, that is, transactions under which companies recognize an asset and a liability. The amendments clarify that the exemption does not apply to this type of transactions and that companies are required to recognize deferred taxes. The purpose of the amendments is to reduce the diversity in the disclosure of de- ferred taxes on leases and provisions for decommissioning. The changes are effective for annual periods beginning on or after January 1st, 2023. Early application is permitted. c) Amendments to IFRS 17 - Insurance contracts: initial application of IFRS 17 and IFRS 9 - Comparative Information The International Accounting Standards Board (IASB) has issued an amendment to the scope of the transition requirements of IFRS 17 - Insurance Contracts, providing insurers with an option aimed at improving the usefulness of information for inves- tors in the initial application of the new Standard. The amendment does not affect any other requirements of IFRS 17. IFRS 17 and IFRS 9 - Financial Instruments have different transition requirements. For some insurers, these differences may cause temporary accounting mismatches between financial assets and insurance contract liabilities in the comparative infor- mation they present in the financial statements when applying IFRS 17 and IFRS 9 for the first time. The amendment will help insurers avoid these temporary accounting lags and there- fore increase the usefulness of comparative information for investors. IFRS 17, including this amendment, is effective for annual reporting periods begin- ning on or after 1st January 2023. These standards, not yet adopted by the European Union, were not applied by the Group in 2021. 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 (definition 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 compa- nies, corresponding to the participation of third parties, is presented separately in the consolidated statement of financial position and statement of comprehensive income, under the heading non-controlling interests. The companies included 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. 341