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financial statements 2011
Exemption from Comparative
ifrs
7 Disclosures for
First-Time Adopters
(effective for financial periods
beginning on or after July 1, 2010). The amendment
has had no effect for consolidated financial state-
ments.
–
Improvements to ifrss
– amendments, May 2010
(effective mainly for financial periods beginning on
or after July 1, 2010). Through the Annual Improve-
ments procedure, small and less urgent amend-
ments to the standards are collected and imple-
mented together once a year. The amendments in
the project apply to seven standards. Their impact
varies from standard to standard, but they had no
significance for the consolidated financial state-
ments.
In order to prepare the financial statements in compli-
ance with the ifrs, the Group management must
make estimates and use their judgment in selecting
and applying accounting policies. Information on the
judgments made by the management in applying the
financial statements accounting policies of the Group,
and which have the greatest impact on the figures pre-
sented in the financial statements, is presented in the
accounting policies section “Accounting policies requir-
ing the management’s judgment, and key uncertainties
associated with estimates”.
Subsidiaries
The consolidated financial statements cover the parent
company, Edita Plc, and all its subsidiaries. Subsidiaries
are companies in which the Group exercises control.
Control is constituted when the Group holds over half
of the voting power or otherwise exercises control.
The existence of potential voting power is also taken
into account when assessing the conditions for control.
Control refers to the right to determine a company’s
financial and business policies in order to derive benefit
from its operations.
Accounting for the subsidiaries is reported using
the acquisition cost method. Acquisition value for the
subsidiaries is allocated in accordance with identifiable
assets and assumed liabilities, which are evaluated at the
fair value at the time of acquisition. Costs associated
with acquisitions are recorded as expenses. A possible
contingent additional purchase price is valuated at the
fair value at the time of acquisition and it is recognized
as a liability. An additional purchase price classified as a
liability is valuated at the fair value on the ending date
of each reporting period and any profit or loss derived
from this is recorded as either profit or loss.
Subsidiaries acquired are consolidated in the con-
solidated financial statements from the date when the
Group obtained control, while subsidiaries divested are
consolidated up to the date when control ceases. All
business transactions within the Group, internal receiva-
bles and liabilities and internal distribution of profit are
eliminated in the consolidated financial statements.
The allocation of profit or loss for the financial
period to the parent company shareholders and non-
controlling interests is presented in a separate income
statement and the allocation of comprehensive income
to the parent company shareholders and non-con-
trolling interests is presented in connection with the
comprehensive income statement.
Any shares held by non-controlling interests in
the acquiree are measured either at the fair value or
at an amount which corresponds to the share of the
share held by the non-controlling interests relative to
the identifiable net assets of the acquiree. The basis of
measurement is defined separately for each acquisi-
tion. Comprehensive income is allocated to the parent
company shareholders and non-controlling interests,
even if this should mean that the shares held by the
latter become negative.
The share of shareholders’ equity owing to non-
controlling interests is presented as a separate item on
the balance sheet under shareholders’ equity. Changes
in the parent company’s shareholding in the subsidiary,
which do not lead to loss of control, are treated as
equity-related transactions.
A previous shareholding in a staggered acquisi-
tion is measured at the fair price and any profit or loss
derived from this is recorded as either profit or loss.
When the Group loses control in a subsidiary, the
remaining investment is measured at the fair price on
the date of the expiry of control and the difference
derived from this is recorded as either profit or loss.
Acquisitions made prior to January 1, 2010 have
been treated according to the policies effective at the
time.
Associates
Associates are companies in which the Group has
significant influence. Significant influence is reached
when the Group owns more than 20% of the com-
pany’s voting power or when the Group otherwise has
significant influence, but not control.
Associates are consolidated by using the equity
method.
If the Group’s share of an associate’s losses
exceeds the carrying amount of the investment, the
investment is recognized at zero value on the balance
sheet. Losses exceeding the carrying amount are not
aggregated, unless the Group is committed to fulfilling
the obligations of the associates.