4 - Refresco.de

Financial review 2009
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized
income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
Unrealized losses are eliminated in the same way as unrealized
gains, but only to the extent that there is no evidence of
impairment.
2.2 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into the
respective functional currencies of Group entities at the
exchange rates at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the
reporting date are translated into the functional currency at the
exchange rate at that date. The foreign currency gain or loss
on monetary items is the difference between amortized cost in
the functional currency at the beginning of the period, adjusted
for effective interest and payments during the period, and the
amortized cost in foreign currency translated at the exchange
rate at the end of the period. Non-monetary assets and liabilities
denominated in foreign currencies that are measured
at fair value are retranslated into the functional currency at the
exchange rate at the date that the fair value was determined.
Foreign currency differences arising on translation are recognized
in profit or loss, except for differences arising on financial
liabilities designated as a hedge of the net investment in a
foreign operation, which are recognized in the foreign currency
translation reserve (FCTR).
Foreign operations
The assets and liabilities of foreign operations, including good-
will and fair value adjustments arising on acquisition, are trans-
lated into Euros at the exchange rate at the reporting date. The
income and expenses of foreign operations are translated into
Euros at the exchange rates at the dates of the transactions.
Foreign currency differences arising thereon are recognized,
in other comprehensive income, in the FCTR. When a foreign
operation is disposed of, either in part or in full, the associated
cumulative amount in the FCTR is transferred to profit or loss
as an adjustment to the profit or loss on disposal.
Foreign exchange gains and losses arising on a monetary item
receivable from or payable to a foreign operation, the settlement
of which is neither planned nor likely in the foreseeable
future, are considered to form part of the net investment in the
foreign operation and are recognized in other comprehensive
income in the FCTR.
Hedge of a net investment in a foreign operation
Translation differences on intra-group long-term loans that
effectively constitute an increase or decrease in a net
investment in a foreign operation are recognized in other
comprehensive income in the reserve for translation
differences.
2.3 Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in
held-to-maturity investments, trade and other receivables, cash
and cash equivalents, loans and borrowings, and trade and
other payables.
Non-derivative financial instruments are recognized initially at
fair value plus, for instruments not at fair value through profit
or loss, any directly attributable transaction costs. Subsequent
to initial recognition, non-derivative financial instruments are
measured as described below.
Cash and cash equivalents comprise cash balances, checks in
transit and call deposits. Bank overdrafts that are repayable
on demand and form an integral part of the cash management
processes are included as a component of cash and cash
equivalents for the purpose of the cash flow statement.
The accounting for finance income and expense is described in
note 2.16.
Held-to-maturity investments
If the Group has the positive intent and ability to hold debt
securities to maturity, the securities are classified as heldto-maturity.
Held-to-maturity investments are measured at