IBERSOL | Integrated Management Report 2022

INTEGRATED MANAGEMENT REPORT 2022 The assets and liabilities of each Group company are identified at their fair value at the acquisition date as prescribed by IFRS 3. Any excess of cost over the fair value of the net assets and liabilities acquired is recognized as goodwill. If the difference be- tween the acquisition cost and the fair value of the net assets and liabilities acquired is negative, it is recognized as income for the year. Transaction costs directly attributable to business combinations are immediately recognized in profit or loss. Non-controlling interests include the third parties’ proportion of the fair value of the identifiable assets and liabilities at the date of acquisition of the subsidiaries. Subsequent transactions of disposal 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, being any difference between the transaction value and the book value of the traded interest, recognized in equity, in other equity instru- ments. 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 subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Group. 2.1.5.2. Associates and joint ventures The Group’s interests in entities where it exercises joint control with other partners are measured using the equity method, by applying IFRS 11, from the date when joint control is acquired. The Group integrates its share of the assets and liabilities in one line in the Consolidated Statement of Financial Position and the expenses and income of the joint venture in one line in the Consolidated Statements of Income and Other Comprehensive Income. Balances and transactions between Group com- panies and entities where the Group exercises control jointly with other partners are not eliminated to the extent of the control attributable to the Group. The excess of 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 recog- nized as a financial investment. The entities where the group exercises control jointly with other partners are de- tailed in note 1.2. The existence of significant influence by the Group is normally demonstrated in one or more of the following ways: 389