Download Complete PDF - Informe Anual 2012

4.12 Official subsidies
Group companies follow the criteria set out below to book official subsidies:
- Non-reimbursable capital subsidies (connected with assets) are valued at the amount granted, booked as deferred income and attributed to
results in proportion to the depreciation of the assets financed by such subsidies during the financial year.
- Operating subsidies are booked as income at the moment of their accrual.
4.13 Tax on profits
The cost of the year’s income tax is calculated through the sum of the current tax resulting from applying the tax rate to the taxable income for
the year and then applying the relevant tax adjustments according to the law plus any changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities include temporary differences, being any amounts expected to be payable or recoverable due to differences
between the book values of the assets and liabilities and their tax value, as well as the tax losses carryforward and any credits resulting from
unapplied tax relieves. Said amounts are booked by applying to the relevant temporary difference or credit the tax rate at which they are
expected to be recovered or settled.
In some countries, the tax rate varies depending on whether a transfer of assets is made. In these cases, the Group’s policy consists of applying
the effective tax rate at which they are expected to be recovered or settled. In the opinion of the Directors of the Group, the deferred tax thus
calculated covers the amount which may eventually be settled, if any, in the foregoing case.
Deferred tax liabilities for all taxable temporary differences are recognised, except for those in which the temporary difference arises from the
initial recognition of goodwill whose depreciation may not be deducted for tax purposes or the initial recognition of other operating assets
and liabilities which do not affect either the tax or accounting result.
Deferred tax assets identified as temporary differences, meanwhile, are only recognised if it is deemed probable that the consolidated entities
will make sufficient tax profits in the future to make them effective and they do not come from the initial recognition of other assets and
liabilities in a transaction which does not affect either the tax or accounting result. Other deferred tax asset (tax losses carryforward and tax
credits) are only recognised if it is likely that the consolidated companies will make sufficient tax profits in the future to make them effective.
At each year-end, deferred taxes (both assets and liabilities) are reviewed in order to verify that they remain in force and the relevant corrections
are made in accordance with the outcome of the analyses conducted.
4.14 Undertakings made to the personnel
Spanish hotel companies are obliged to make a specific number of monthly salary payments to those employees who leave the company due to
retirement, permanent incapacity to work or upon reaching a certain age, as well as to those who have attained a certain level of seniority and
fulfilled certain pre-established requirements.
The liabilities accrued for these obligations are booked under the “Provisions for liabilities and charges” item of the consolidated balance sheet
attached (see Note 21).
In accordance with Royal Decree Law 16/2005, the Group has outsourced the above-mentioned undertakings, financing all the services accrued
in advance.
In accordance with prevailing Italian legislation, the employees of the subsidiary company Donnafugata Resort S.r.l. are entitled to compensation
should they voluntarily leave the company or be dismissed. The “Non-current provisions” item of the consolidated balance sheet attached hereto
includes the liabilities accrued for this item, which amounted to €193,000 at 31 December 2012 (€200,000 in 2011).
4.15 Onerous agreements
The Group considers onerous agreements to be those in which the inevitable costs of fulfilling the obligations they entail exceed the economic
benefits expected from them.
The Group follows the principle of recording a provision at the present value of the aforementioned differences between the costs and benefits
of the contract, or the compensation foreseen for abandonment of the contract, if such is decided.
The pre-tax discount rates used reflect the current market value of money, as well as the specific risks associated with these agreements. More
specifically, a rate of between 7.42% and 12% has been used.
4.16 Share-based remuneration schemes
These schemes are valued at the time of granting, using a financial method based on a binomial model which takes into consideration the strike
price, volatility, the exercise period, the expected dividends, the risk-free interest rate and the hypotheses made concerning the financial year.
In accordance with IFRS 2, above-mentioned valuation is attributed to profit or loss under personnel expenses during the period established
for the employee to remain in the company before exercising the option. This value is imputed on a straight-line basis to the consolidated
comprehensive profit and loss statement from the date the scheme was implemented to the exercise date. As set forth in the Rules of the
Scheme, settlement is to be made in cash. Therefore, the valuation obtained is recognised with a counter liability in favour of employees.
Furthermore, the Group re-estimates the initial valuation mentioned above every year by recognising in the year’s profit or loss both the part
corresponding to the year in question and those corresponding to previous years.
Subsequently, the difference between the settlement and the recognised liability, as described above, for any transactions settled is booked
in the consolidated comprehensive profit and loss statement once the required permanence period has transpired. Ongoing transactions at
76 REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS