IBERSOL | Annual Report 2021

CONSOLIDATED FINANCIAL STATEMENTS 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. (b) Entities where the group exercises control jointly with other partners The Group’s interests in entities where the Group exercises control jointly with other partners are measured through the equity method, using IFRS 11, from the date when joint control is acquired. The Group integrates its share in assets and liabilities in a heading in the Consolidated Statement of Financial Position and the costs and income of the joint venture in a line in the Consolidated Statement of Income and other comprehensive income. Balances and transactions between Group companies and entities where the Group exercises control jointly with other partners are not eliminated in proportion to the control attributable to the Group. The excess of the acquisition cost over the fair value of identifiable assets and liabilities of the entity where the Group exercises control jointly with other partners, on the acquisition date, is recognized as a financial investment. The entities where the Group exercises control jointly with other partners are de- tailed in Note 5. (c) Entities where the group has significant influence The existence of significant influence by the Group is usually demonstrated in one or more of the following ways: - representation on the Executive Board of Directors or equivalent governing body; - participation in policy-making processes, including participation in decisions on dividends or other distributions; 342