•
•
•
IFRIC 8 – “Scope of application of IFRS 2” (mandatory in financial years commencing as from 1 May 2006); IFRIC 8 requires that the matter of whether or not transactions entail an issue of equity instruments (in cases in which the identifiable consideration is lower than the fair value of the equity instruments issued) be considered when determining whether or not such transactions come under the scope of IFRS 2. The Group will begin to apply IFRIC 8 as from 1 January 2007, although it is not expected to affect the Group’s accounts. IFRIC 9 – “Reassessment of embedded derivatives” (mandatory in financial years commencing as from 1 June 2006); IFRIC 9 requires companies to assess whether or not an embedded derivative must be separated from the host contract and recognised as a derivative when the company becomes party to the contract. A subsequent reassessment is prohibited, unless changes are made to the terms of the contract that entail a significant modification of the cash flows that would otherwise have been generated by the contract, in which case a reassessment must be performed. As none of the Group companies has changed the terms of its contracts, Cintra understands that IFRIC 9 will have no relevant impact on the accounting treatment of the Group’s transactions. IFRS 7 – “Financial instruments: Disclosures” (mandatory in financial years commencing as from 1 January 2007). This IFRS brings in new requirements to improve the information disclosed on financial instruments presented in the financial statements and supersedes IAS 30, Disclosures in the financial statements of banks and similar financial institutions, and certain requirements of IAS 32, Financial Instruments: disclosure and presentation. The amendment to IAS 1 brings in disclosure requirements concerning capital. IFRS 7 is applicable to the years commencing on and after 1 January 2007. Its application will not be significant in relation to the Ferrovial Group’s Consolidated Financial Statements.
4) Standards, amendments to standards and interpretations issued by the IASB and yet to be adopted by the European Union that came into force after 1 January 2006 according to the IASB and have not therefore been adopted early by the Group: • IFRS 8 – “Operating Segments” (mandatory in financial years commencing as from 1 January 2009). This standard will supersede IAS 14 – “Segment reporting” and relates to the convergence with US standards in this area, contained in FAS 131 – “Disclosures about Segments of an Enterprise and Related Information”, based on the breakdown of segment 100
•
•
•
information in the information used to take decisions. The Ferrovial Group is assessing the impact of the new standard on its financial information. IFRIC 10 – “Interim Financial Reporting and Impairment” (mandatory in financial years commencing as from 1 November 2006). IFRIC 10 prohibits the reversal of impairment losses recognised in an interim period in respect of goodwill, investments in equity instruments and investments in financial assets at cost, at a subsequent balance sheet date. The Group will consider the application of IFRIC 10 when it is adopted by the European Union, although this is not expected to affect the Group’s accounts. IFRIC 11 – “IFRS 2 – Group and Treasury Share Transactions” (mandatory in financial years commencing as from 1 March 2007). IFRIC 11 develops the application of IFRS 2 to share-based payments when the shares are acquired from third parties or furnished by the company’s shareholders, or payments based on the shares of a different company of the same group. Once adopted by the European Union, Ferrovial will assess early adoption, even though this standard is not expected to have a significant impact on the financial information. IFRIC 12 – “Service Concession Arrangements” (see comments above).
The 2006 individual financial statements of the consolidated companies and these consolidated financial statements are pending approval by the General Shareholders’ Meetings. Nevertheless, the companies’ directors expect them to be approved without any changes.
2.2. Consolidation policies In 2006 and 2005 the closing date for the individual financial statements of all the companies included in the scope of consolidation is the same as or has been brought into line with the date employed by the parent company. The Consolidated Financial Statements have been prepared using the following methods: a. Full consolidation method All the subsidiaries are fully consolidated. Subsidiaries are companies in which Grupo Ferrovial, S.A. has effective management control because it holds more than 50% of voting rights, directly