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financial statements 2011
17
An investment in an associate includes the
goodwill resulting from the acquisition. A share of as-
sociates’ profits for the financial year that corresponds
with the Group’s holding is presented as a separate
item under operating profit. The Group’s share in
associates’ changes recognized in other items of com-
prehensive income are recognized accordingly in the
Group’s other items of comprehensive income. The
Group’s associates have not had any such items during
the 2010–2011 financial periods..
Translation of Items Denominated
in Foreign Currencies
The figures related to the profit and financial position
of the Group’s units are measured in the currency of
each unit’s main operating environment (“the operat-
ing currency”). The consolidated financial statements
are presented in euros, which is the operating and
reporting currency of the Group’s parent company.
Business transactions denominated in foreign
currencies are recognized in the operating currency
according to the exchange rate prevailing on the
transaction date. Monetary items denominated in
foreign currencies are translated into operating cur-
rency amounts using the exchange rates of the balance
sheet date. Non-monetary items are measured at the
exchange rates of the measurement date.
Gains and losses arising from transactions denomi-
nated in foreign currencies and from the translation of
monetary items are recognized through profit or loss.
Exchange rate gains and losses related to business op-
erations are included in the corresponding items above
the operating profit line. Exchange rate gains and
losses related to foreign currency loans are included in
financial income and expenses.
Income and expense items on the comprehensive
income statements and separate income statements of
foreign Group companies are translated into euros at
the average exchange rate of each company’s financial
year and their balance sheets are translated at the ex-
change rates of the end date of the reporting period.
Translating income and comprehensive income
for the year at different exchange rates in the income
statement and comprehensive income statement and
in the balance sheet results in a translation difference,
which is recognized under shareholders’ equity, in
the balance sheet. Changes in translation difference
are recognized under other items of comprehensive
income. Translation differences arising from the elimi-
nation of the acquisition cost of foreign subsidiaries
and from the translation of equity items accumulated
after the acquisition, as well as the effect of hedging
instruments on net investments are recognized under
other items of comprehensive income. When subsidi-
aries are divested in whole or in part, the aggregated
translation differences are recognized in the income
statement under sales gains or losses.
According to the exemption permitted by ifrs
1, translation differences arising before January 1,
2007, the date when the Group adopted the ifrs, are
recognized under retained earnings in conjunction with
the transfer to ifrs, and will not be recognized in the
income statement at a later date in conjunction with
the sale of a subsidiary. As of the transfer date, transla-
tion differences arising in drawing up the consolidated
financial statements are recognized as a separate item
under shareholders’ equity.
As of January 1, 2007, goodwill resulting from the
acquisition of foreign units, and fair value adjustments
made to the carrying amounts of said foreign units’
assets and liabilities in conjunction with the acquisition,
are treated as assets and liabilities of said foreign units
and are translated into euros using the exchange rates
of the balance sheet date.
Tangible Fixed Assets
Tangible fixed assets are recognized at cost less accu-
mulated depreciation and, when applicable, impairment.
Expenses arising directly from the acquisition of a
tangible fixed asset are included in the acquisition cost.
If a fixed asset comprises several parts whose useful
lives are of different lengths, each part is treated as a
separate asset. In this case, the costs associated with
renewing each part are capitalized and, in connec-
tion with the renewal, any remaining carrying amount
is recognized off balance sheet. In other cases, costs
arising later are included in the carrying amount of a
tangible fixed asset only when it is likely that the future
financial benefit associated with the asset will benefit
the Group and when the acquisition cost of the asset
can be reliably calculated. Other repair and mainte-
nance costs are recognized through profit or loss, once
they are realized.
Tangible fixed assets are depreciated using the
straightline method throughout their estimated useful
life. Land is not depreciated. The estimated useful lives
are as follows:
Buildings and structures
10–30 years
Machinery and equipment
4–15 years
The residual values and useful lives of assets are
checked for all financial statements and, if necessary,
are adjusted to reflect changed conditions.
When tangible fixed assets are classified as for
sale according to ifrs 5
Non-current assets held for sale