Basis of Presentation and Consolidation

General information

The consolidated financial statements of the ACEA Group for the year ended 31 December 2012 were approved by the Board of Directors’ resolution on 8 March 2013. The Parent Company, ACEA SpA, is an Italian joint-stock company, with its registered office in Rome, at Piazzale Ostiense 2, and whose shares are traded on the Milan Stock Exchange.

The ACEA Group’s principal areas of activity are described in the Management Operations' Report.

 

Compliance with IAS/IFRS

The consolidated financial statements have been prepared under the IFRS effective at the end of the reporting period, as approved by the International Accounting Standards Board (IASB) and adopted by the European Union. The standards consist of International Financial Reporting Standards (IFRS), International Accounting Standards (IAS) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and of the Standing Interpretations Committee (SIC), collectively referred to as “IFRS”.

 

Basis of presentation

The consolidated financial statements consists of the consolidated statement of financial position, consolidated income statement, statement of consolidated comprehensive income, consolidated statement of cash flows and the statement of changes in consolidated shareholders’ equity. The Report also includes notes prepared under the IAS/IFRS currently in effect.

The income statement is classified on the basis of the nature of expenses, the statement of financial position is based on the liquidity method by dividing between current and non-current items, whilst the statement of cash flows is presented using the indirect method.

The consolidated financial statements have been prepared in euros and all amounts have been rounded off to the nearest thousand euros, unless otherwise indicated.

The figures in these consolidated financial statements are comparable to the figures in the previous period.

 

Alternative performance indicators

In line with recommendation CESR/05-178b, the content and meaning of non-GAAP measures of performance and other alternative performance indicators used in these financial statements are described below:

  1. gross operating profit is used by the ACEA Group as an indicator of operating performance and is calculated by adding “Amortisation, depreciation, provisions and impairment charges” to the operating result;
  2. net debt indicates the state of the ACEA Group’s financial structure and is obtained by adding non-current borrowings and financial liabilities, less non-current financial assets (loans and receivables and securities other than investments), to current borrowings and other current liabilities, less current financial assets and cash and cash equivalents;
  3. net invested capital is the sum of “Current assets”, “Non-current assets” and assets and liabilities held for sale, less “Current liabilities” and “Non-current liabilities”, excluding items taken into account in calculating net debt.

 

Use of estimates

In application of IFRS, preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of revenue, costs, assets and liabilities and the disclosure of contingent assets and liabilities as at the reporting date. The actual amounts may differ from such estimates. Estimates are used for the recognition of provisions for credit risk, obsolescent inventories, impairment charges incurred on assets, employee benefits, fair value of derivatives, taxes and other provisions. The original estimates and assumptions are periodically reviewed and the impact of any change is recognised in the income statement.

In addition, it should be noted that certain estimation processes, particularly the more complex such as the calculation of any impairment of non-current assets, are generally performed in full only when drafting of the annual financial statements, unless there are signs of impairment that call for immediate impairment testing.