Septiembre 2011

Transactions between Group companies

Merger and spin-off transactions:

If a parent and a subsidiary thereof are involved, the assets and liabilities acquired are measured at the amount corresponding to them in the Group’s consolidated financial statements, with any difference that arises recognised in reserves.

In the case of transactions between other Group companies (e.g. transactions between “sister companies”), the assets and liabilities acquired are measured in the same way as indicated above.

The consolidated financial statements that must be used for this purpose are those of the largest subgroup or group whose parent is Spanish.

In this type of transaction, the effective date for accounting purposes is the beginning of the period in which the merger or spin-off

is approved, provided that this date is subsequent to when the companies joined the group.

Capital reduction, dividend distribution and company dissolution transactions.

The transferor recognises the difference between the amount of the payable to the shareholder or owner and the carrying amount of the business given up, with a credit to reserves.
Changes in accounting policies, errors and accounting estimates

Changes in accounting policies, errors and accounting estimates

Changes in accounting policies and correction of errors Retrospective application, and the effect thereof, is calculated from the earliest year for which information is available.

The resulting income or expense corresponding to prior years will give rise, in the year in which the change in accounting policy or correction of the error takes place, to the corresponding adjustment for the cumulative effect of the changes in assets and liabilities, which will be recognised directly in equity.

The amounts affected in the comparative information for the years that these circumstances affect will be modified.

Changes in accounting estimates

Changes in estimates that result from the obtainment of additional information, more experience or knowledge of new facts after the end of the reporting period are not considered to be changes in accounting policy.

Changes in accounting estimates are applied prospectively, and the effect thereof is recognised, based on the nature of the transaction, as income or expense in the income statement for the year or, where appropriate, directly in equity.

The effect, if any, on future periods is recognised as income or expense in those future periods.