Econocom - 2019 Universal registration document

06 consolidated financial statements

notes to the consolidated financial statements

Impairment of goodwill Following initial recognition, goodwill is measured at cost less any accumulated impairment losses, determined in accordance with the method described in note ژ 9.3. Goodwill impairment losses are recorded under “Non-recurring operating income and expenses” within operating profit in the consolidated income statement. TRANSLATION OF FOREIGN 2.1.3. CURRENCIES Functional currency and 2.1.3.1. presentation currency The items in the financial statements of each Group entity are measured using the currency of the primary economic environment (or “functional currency”) in which the entity operates. The consolidated financial statements presented in this report were prepared in euros, which is the Group’s presentation currency. Recognition of foreign 2.1.3.2. currency transactions For the purpose of preparing the financial statements of each entity, foreign currency transactions of subsidiaries ( i.e., currencies other than the entity’s functional currency) are recorded using the exchange rates prevailing at the transaction date. Monetary items denominated in foreign currencies are translated at the end of each reporting period at the ژ year-end rate. Foreign exchange gains and losses resulting from this translation at ژ year-end exchange rates, or arising on the settlement of these monetary items, are recognised in the income statement for the period in which they occur.

Non-monetary items denominated in foreign currencies and recognised at fair value are translated using the exchange rate prevailing at the date the fair value was determined. Non-monetary items denominated in foreign currencies and measured at historical cost are not remeasured. When a gain or loss on a non-monetary item is recognised directly in equity, the “currency” component of this gain or loss is also recognised in equity. Otherwise, this component is recognised in profit or loss for the period. Translation of the financial 2.1.3.3. statements of foreign entities The results and financial positions of the Group’s entities with functional currencies other than the presentation currency are translated into euros as follows: statement of financial position items • other than equity are translated at the ژ year-end exchange rate; income statement and statement of cash • flow items are translated at the average exchange rate for the ژ year; all resulting exchange differences are • recognised under “Foreign currency translation adjustments” within other comprehensive income. LIABILITIES UNDER PUT AND 2.1.4. CALL OPTIONS ON NON-CONTROLLING INTERESTS The Group may grant put options to non-controlling shareholders of some of its subsidiaries. The exercise price of these options is generally measured based on future performance and profitability.

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2019 annual report