2007 - Pinguely Haulotte

2007
annual report # p89-90
Consolidated financial statements of December 31st, 2007
2.3 Basis of consolidation
a) Subsidiaries
Subsidiaries in which Haulotte Group
S.A. exercises directly or indirectly exclusive
control are fully consolidated. They are
deconsolidated on the date that control
ceases.
b) Associates
Companies in which the Group exercises
significant influence without exercising
control are consolidated under the equity
method.
Shares of companies not considered
significant or in which the Group does
not exercise significant influence are
recognized as financial assets at fair value.
The list of subsidiaries and equity
associates is disclosed in note 6.
2.4 Intercompany balances and
transactions
All intercompany balances and
transactions between fully consolidated
companies are eliminated.
2.5 Foreign currency translation of
financial statements of foreign
subsidiaries
The functional currency of the parent
company, Haulotte Group S.A., is the euro
that which is also the presentation currency
in the consolidated financial statements.
Financial statements of foreign subsidiaries
are presented on the basis of their functional
currency, i.e. the local currency.
The financial statements of foreign
companies for which the functional
currency differs from the presentation
currency (euro) are converted into the
presentation currency as follows:
- Assets and liabilities are translated at the
year-end exchange rate;
- Income statement items are converted
at the average exchange rate for the
period (based on the average monthly
rate over 12 months).
Exchange differences from the translation
of the financial statements of the
subsidiaries are recognized as a separate
component of equity and broken down
between the parent company share
and minority interests.
2.6Translation of transactions in foreign
currency
Transactions in foreign currencies are
translated by the subsidiary in its
functional currency at the exchange rate
of the transaction date. At year-end,
monetary items of the balance sheet
denominated in foreign currencies are
translated at closing exchange rates.
Receivables and payables covered by
foreign exchange hedges are translated
at the hedge rate.
Gains and losses on translation are
recorded directly in the income
statement under operating income as
"exchange gains and losses" except
foreign net investments as defined under
IAS 21 for which exchange differences
are recognized under equity.
2.7 Business combinations
Business combinations are recorded on
the basis of the purchase method of
accounting:
- The cost of an acquisition is measured
as the fair value at the date of exchange
of assets given, liabilities incurred or
assumed, plus any costs directly
attributable to the combination.
- Acquired identifiable assets, liabilities,
and contingent liabilities are measured
initially by the acquirer at their fair values
at the acquisition date, irrespective of
the extent of any minority interest. The
excess of the cost of acquisition over
the Group’s share in the fair value of
the identifiable net assets is reviewed
for allocation to intangible assets if
necessary. The unallocated residual
amount is recorded as goodwill. If the
Group's share in the fair value of the
acquired identifiable net assets exceeds
the cost of acquisition, that difference
is recognized directly in the income
statement (see note 3.1).
2.8 Segment reporting
A business segment is a group of assets
and operations engaged in providing
products or services subject to risks and
returns different from those of other
business segments.
A geographical segment is a group
of assets and operations engaged in
providing products or services in a
particular economic environment subject
to risks and returns different from those
of segments operating in other economic
environments.
Note 3
Principles and methods for the
valuation of key balance sheet
aggregates
3.1 Goodwill
Any excess of the cost of an acquisition
over the Group’s share in the fair value
of the identifiable net assets of the
acquired entity at the acquisition date is
recorded in the balance sheet as goodwill.
Negative goodwill or badwill is
recognised immediately under operating
income as a gain and no later than 12
months after verifying the correct
identification and valuation of acquired
assets and liabilities.
Goodwill is not amortized but is subject
to impairment tests when there exists
an indication of impairment and at least
once a year on the basis of the present
value of future cash flows of the entity
defined as a Cash Generating Unit (CGU).
An impairment loss is recognized when
the net present value of future cash flows
is lower than the carrying value. This
impairment loss, when applicable, is
recorded under operating income in a
distinct line "Badwill/impairment of
goodwill".