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If the Group loses significant influence over or joint control of
a strategic investment, it derecognizes the carrying amount of
the strategic investment (including any goodwill included in the
carrying amount) and recognizes any resulting gain or loss,
including the recycling of amounts previously recognized in
the statement of other comprehensive income, from this event
in the consolidated statement of profit or loss. Any investment
retained is recognized at fair value as a financial instrument
available for sale.
3.2.4 ELIMINATION OF TRANSACTION UPON
CONSOLIDATION
Intragroup receivables and payables, as well as intragroup
transactions, finance income and expenses and unrealized
results within the Group are eliminated in the preparation of
the consolidated financial statements. The Group recognizes
its share in the results on transactions that transfer assets and
liabilities between the Company and its strategic investments
or between its strategic investments, to the extent these are
considered realized as transactions with third parties and its
joint venture partners, using proportionate elimination.
3.2.5 BUSINESS COMBINATION AND ACQUISITIONS OF
NON-CONTROLLING INTERESTS
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognized amount of any non-controlling interests in the
acquiree; plus
if the business combination is achieved in stages, the fair
value of the existing equity interest in the acquiree (refer also
note to 3.8); less
the net recognized amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
If the excess is negative (bargain purchase), the Group
reassesses the correctness and completeness of the identified
assets acquired and liabilities assumed, and the
appropriateness of underlying assumptions and measurement
approaches applied for valuation purposes. After such
reassessment, the determined gain on a bargain purchase is
immediately recognized in the statement of profit or loss.
The consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Such amounts
are recognized in the statement of profit or loss. Costs related
to the acquisition, other than those associated with the issue of
debt or equity securities, that the Group incurs in connection
with a business combination are expensed as incurred.
A newly acquired non-controlling interest is valued at either
the fair value or the proportionate share of the fair value of the
acquired asset and liabilities, determined per transaction.
Accounting for acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for as
transactions with owners in their capacity as owners and
therefore no goodwill is recognized as a result of such
transactions.
FOREIGN CURRENCIES
3.3
The assets and liabilities of foreign Group companies and joint
ventures that are denominated in functional currencies other
than the euro are translated at the exchange rates as at the
end of the reporting period. The statement of profit or loss
items of the foreign Group companies and joint operations
concerned have been translated at average exchange rates,
which approximate the applicable exchange rates at
transaction settlement date. Resulting currency translation
differences are added or charged directly to the currency
translation reserve in group equity. Exchange rate differences
as a result of operational transactions are included in the
consolidated statement of profit or loss of the reporting period.
At the end of each reporting period, monetary items
denominated in foreign currencies are translated at the rates
prevailing 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 year, adjusted for
effective interest and payments during the year, and the
amortized cost in foreign currency translated at the exchange
rate at the end of the year. Non-monetary items that are
measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the
transaction. Foreign currency differences on non-current
receivables (including those related to financing), loans and
other borrowings are recognized as finance income and
expenses, except for the foreign currency differences on loans
which are part of a net investment hedge which are
recognized in other comprehensive income and other foreign
currency differences as a result of transactions are recognized
in the related items within the operating result.
Joint ventures and associated companies with a functional
currency other than the presentation currency of the Group are
translated according to the aforementioned method, taking
into account that assets and liabilities of these interests are not
consolidated.
DERIVATIVES AND HEDGING
3.4
It is the policy of the Group to use cash flow hedges to cover
all operational currency risks that mainly relate to future cash
flows from contracts which are denominated in currencies
other than the relevant functional currency and if it is highly
probable that they will be realized. Fuel price risks and
interest rate risks in future cash flows can be hedged from time
to time using specific derivatives.
Hedge accounting is applied to the majority of cash flow
hedges as follows. On initial designation of the hedge, the
Group formally documents the relationship between the
hedging instrument(s) and hedged item(s), including the risk
management objectives and strategy in undertaking the hedge
transaction, together with the methods that will be used to
assess the effectiveness of the hedging relationship. The Group
makes an assessment, both at the inception of the hedge
relationship as well as on an ongoing basis, of whether the
hedging instruments are expected to be ‘effective’ in offsetting
the changes in the fair value or cash flows of the respective
hedged items during the period for which the hedge is
designated, and whether the actual results of each hedge are
within a range of 80 - 125 percent. For a cash flow hedge of
a forecast transaction, the transaction should be highly
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ANNUAL REPORT 2016 – BOSKALIS
FINANCIAL STATEMENTS 2016