Page 41 - CODIC 2016/2017 - Annual report

of the control exercised over an undertaking, which only exists if decisions concerning the relevant activities
require the unanimous consent of the parties sharing control.
When a Group entity carries on its activities in the framework of a joint undertaking, the Group, as joint partner, must
recognise the assets and liabilities relating to its interests in the joint undertaking.

2.3. Business combinations
When the Group acquires control of a business, this transaction constitutes a business combination, and
is recognised using the acquisition method. The consideration transferred upon a business combination is
the sum of the fair value at acquisition date of the assets transferred by the Group, the liabilities incurred by
the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
control of the acquiree. Acquisition-related costs are expensed as incurred, with the exception of costs directly
associated with the issue of debt or equity instruments.
Goodwill arising on a business combination represents the excess of the aggregate of the consideration
transferred and the fair value of any non-controlling interest over the fair value of the net identifiable assets
acquired and liabilities assumed at the date of acquisition. Goodwill is considered as an asset and is subject not
to amortisation but to an annual impairment test at closing (or at more frequent intervals if there are indications
of a loss of value). Impairment of goodwill is expensed immediately and not subject to subsequent reversal.

3. Foreign currency
The financial statements of each Group entity are prepared in the currency of the primary economic environment
in which the entity operates (‘the functional currency’). For the purposes of presenting the consolidated financial
statements, the accounts of Group entities whose functional currencies are other than the euro (EUR) are
translated into this currency, which is the Company’s functional currency and the presentation currency of its
consolidated financial statements. Thus the assets and liabilities relating to these foreign activities are translated
at the closing exchange rates, while revenue and expense are translated at the average rate for the year for
inclusion in the Group consolidated financial statements. Any exchange differences resulting from this translation
are shown in other comprehensive income, in equity, and reclassified in profit or loss when the foreign activity
is disposed of. In preparing the financial statements of each Group entity, transactions denominated in currencies
other than the entity’s functional currency (foreign currency) are recognised at the exchange rate on transaction
date. At each closing, items denominated in foreign currency are translated using the closing rate. Non-monetary
items recognised at fair value and denominated in foreign currency are translated using the exchange rates
in force at the date when this fair value was determined. Non-monetary items measured at historical cost and
denominated in foreign currency are not re-translated.

4. Intangible assets
Intangible assets are measured initially at cost. They are recognised as assets in the balance sheet if the Group
is likely to derive future economic benefits attributable to them and if their cost can be measured reliably. After
initial recognition intangible assets are measured at cost less accumulated amortisation and impairment.
Intangible assets all have a finite useful life. They are therefore amortised using the straight-line method based
on best estimates of their useful lives. Amortisation is recognised in profit and loss under Amortisation Charges.
The amortisation period and method are reviewed at each closing.
The Group’s intangible assets mainly comprise licences and the development of its website (useful life four years).

5. Property, plant and equipment
Items of property, plant and equipment are recognised if the Group is likely to derive future economic benefits
attributable to them and if their cost can be measured reliably. They are initially measured at cost, which
includes all costs directly necessary to prepare the asset for its intended use. Property, plant and equipment is
subsequently measured at cost less accumulated depreciation and impairment. Depreciation is calculated on
a straight-line basis over the estimated useful lives of the assets from the date on which the asset is ready for
use, taking account of any residual value of the assets concerned.
Depreciation is recognised in profit and loss under the heading Depreciation Charges, based on the following rates:

Installations (constructions): 11.11%
Office furniture & equipment: 20.00%
Vehicles: 20.00%
Computer equipment: 25.00%

Gains and losses on disposal or decommissioning of property, plant and equipment are determined by comparing
the proceeds with the carrying amount and are recognised in profit or loss.
Subsequent costs are recognised in profit or loss as incurred, except where such expense leads to an increase in
the expected future economic benefits from the use of the asset concerned compared with its initial performance.
* The notes to the consolidated financial statements are available on www.codic.eu or from the head office upon request.

Codic Annual Report 2016/2017 39