UBI Banca Group

(a) within asset item 120 of the balance sheet if significant economic substance is found;
(b) as a deduction from equity if it is not found.
These transactions are eliminated from the consolidated financial statements and are therefore
recognised solely as the relative costs incurred in relation to parties external to the Group.
The goodwill recognised in the consolidated financial statements of the Group (“goodwill
arising on consolidation” resulting from the elimination of the equity investments in
subsidiaries) is the result of all the goodwill and positive consolidation differences relating to
some of the companies controlled by the Parent.
Any changes in the share of ownership which do not result in the loss or acquisition of control
are to be considered, in compliance with IAS 27, as transactions between shareholders and as
a consequence the relative effects must be recognised as either an increase or a decrease in
equity.
8.4.1. Allocation of the cost of a business combination to assets and liabilities and
contingent liabilities
The acquirer:
(a) recognises the goodwill acquired in a business combination as assets;
(b) measures that goodwill at its cost to the extent that it is the excess of the cost of the
business combination over the acquirer's share of interest in the net fair values of the
acquiree's identifiable assets, liabilities and contingent liabilities.
Goodwill acquired in a business combination represents a payment made by the acquirer in
the expectation of receiving economic future benefits from the asset which cannot be identified
individually and recognised separately.
After initial recognition, the acquirer values the goodwill acquired in a business combination
at the relative cost net of cumulative impairment.
The goodwill acquired in a business combination must not be amortised. The acquirer tests
the asset for impairment annually or more frequently if specific events or changed
circumstances indicate that it may have suffered a reduction in value, according to the relative
accounting standard.
The standard states that an asset (including goodwill) has suffered an impairment loss when
the amount recognised in the accounts exceeds the recoverable amount understood as the
greater of the fair value, net of any sales expenses and its value in use, defined by paragraph 6
of IAS 36.
In order to test for impairment, goodwill must be allocated to cash generating units or to
groups of cash generating units, in observance of the maximum aggregation limit which
cannot exceed the operating segment identified in accordance with IFRS 8.
8.4.2. Negative goodwill
If the acquirer’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities exceeds the cost of the business combination the acquirer:
(a) reviews the identification and measurement of the identifiable assets, liabilities and
contingent liabilities of the acquiree and the determination of the cost of the business
combination;
(b) immediately recognises any excess existing after the new measurement in the income
statement.
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