IBERSOL | Integrated Management Report - 2024

INTEGRATED MANAGEMENT REPORT 2024 5.3.4.Income to be recognized The breakdown of income to be recognized on 31 December 2024 and 2023, is as follows: dec/2024 dec/2023 Indemnity for local works 230 508 257 627 Investment subsidy 289 932 61 544 Others 215 550 170 016 Total income to be recognised 735 990 489 187 6. Investments 6.1. Business combinations Accounting policies The Group accounts for business combinations using the purchase method when the set of activities and assets acquired meets the definition of a business activity and control is transferred to the Group. In determining whether a specific set of ac- tivities and assets is a business activity, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and an applied process that can contribute to creating an output. The consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any goodwill arising is tested annually for impair- ment. Any gain on a purchase at a low price is recognized immediately in the income statement. Transaction costs are recognized as an expense, unless related to the is- sue of debt or equity securities. Any contingent consideration is measured at fair value on the acquisition date. The obligation to pay contingent consideration covered by the definition of financial in- struments is classified as a financial liability or as equity based on the definitions of an equity instrument and a financial liability. Judgments and estimates Under IFRS 3, in a business combination, the acquirer must recognize and measure in the consolidated financial statements the assets acquired and liabilities assumed at fair value on the acquisition date. The level of judgment inherent in determining such fair values means that this is consid- ered a significant accounting estimate. 397