Econocom - 2020 annual report

06 consolidated financial statements

notes to the consolidated financial statements

Basis and scope of consolidation 2.

Accounting principles 2.1. related to the scope of consolidation BASIS OF CONSOLIDATION 2.1.1. These consolidated financial statements includethe financialstatementsof Econocom group SE andall the subsidiariesit controls. According to IFRS 10, an investor controls an investee if and only if the investor has all of the following: power over the investee, i.e. , the ability to • direct the activities that significantly affect the investee’s returns; exposure to the investee’s variable returns, • which may be positive, in the form of a dividend or any other economic or negative benefit; and the ability to use its power over the • investee to affect the amount of the investor’s returns The assets, liabilities, income and expenses of subsidiaries are fully consolidated in the consolidated financial statements and the share of equity and profit attributable to non-controlling interests is presented separately under non-controlling interests in the consolidated statement of financial position and income statement. All intragroup assets, liabilities, equity, income,expensesand cash flows arisingfrom

transactions between entities within the Groupare fully eliminatedon consolidation. Investments in associates and joint ventures are consolidated using the equity method. Under this method, the investment is initially recognised at cost and adjusted to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. If the Group’s share in an associate’s losses is greater than its investment in that associate, the Group ceases to recognise its share in future losses. Additional losses are only recognised if the Group is under a legal or constructive obligation to do so or if it has made payments on behalf of the associate. BUSINESS COMBINATIONS 2.1.2. (AND GOODWILL) Acquisitions of businesses are accounted for using the acquisition method, in accordance with IFRS 3. The cost of a business combination (or “consideration transferred”) is calculated as the aggregate of the acquisition-date fair values of: the assets transferred by the Group; • the liabilities acquired by the Group from • the former owners of the acquiree; and the equity interests issued by the Group • in exchange for control of the acquiree.

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2020 annual report