Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
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the Post-Employment Benefit Provision matured at December 31, 2006 is considered a
defined benefit plan as per IAS 19. The benefits guaranteed to employees, under the form of
the Post-Employment Benefit Provision, paid on the termination of employment, are
recognised in the period the right matures.
the Post-Employment Benefits matured from January 1, 2007 are considered a defined
contribution plan and therefore the contributions matured in the period were fully recognised
as a cost and recorded as a payable in the account “Post-Employment Benefit Provision”,
after deduction of any contributions already paid.
Other long-term employee benefits
The net obligation of the Group for long-term employee benefits, other than those deriving from
pension plans, corresponds to the amount of the future benefits which employees matured for services
in current and previous years. This benefit is discounted, while the Fair Value of any assets is
deducted from the liabilities. The discount rate is the return, at the reporting date, of the primary
obligations whose maturity date approximates the terms of the obligations of the Group. The
obligation is calculated using the projected unit credit method. Any actuarial gains or losses are
recorded in the balance sheet in the year in which they arise.
Short-term employee benefits
Short-term employee benefits are recorded as non-discounted expenses when the services to which
they arise are provided.
The Group records a liability for the amount that it expects will be paid in the presence of a present
obligation, legal or implicit, as a consequence of past events and for which the obligation can be
reliably estimated.
Financial liabilities
Financial liabilities are initially recognised at Fair Value, including directly attributable transaction
costs. Subsequently these liabilities are measured at amortised cost. In accordance with this method
all the accessory charges relating to the provision of the loan are recorded as a direct change of the
payable, recording any differences between cost and repayment amount in the income statement over
the
duration of the loan, in accordance with the effective interest rate method.
Financial instruments
Financial instruments are initially recognised at Fair Value and, subsequent to initial recognition, are
measured on the basis of classification, as per IAS 39.
Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
181
For
financial assets, this is applied according to the following categories:
Financial assets at Fair Value through profit or loss;
Investments held to maturity;
Loans and receivables;
Available-for-sale financial assets.
For
financial liabilities however, only two categories are established:
Financial liabilities at Fair Value through profit or loss;
Liabilities at amortised cost.
In compliance with IAS 39, the derivative financial instruments are recorded in accordance with the
“hedge accounting” method only when: (i) at the beginning of the hedge, the formal designation and
documentation relating to the hedge exists and it is presumed that the hedge is effective; (ii) such
effectiveness can be reliably measured; (iii) the hedge is effective over the accounting periods for
which it was designated.
The effectiveness of hedges is documented both at the beginning of the operation and periodically (at
least at the annual or interim reporting dates).
When the hedging derivatives cover the risk of change in the fair value of the instruments subject to
the hedge (fair value hedge), the derivatives are recorded at fair value with the effects recorded to the
income statement.
When the derivatives hedge the risk of changes in the cash flows of the hedge instrument (cash flow
hedge), the effective part of the changes in the fair value of the derivatives is recognised to the
statement of comprehensive income and presented in the cash flow hedge reserve.
The ineffective part
of the changes in the fair value of the derivative instrument is immediately recognised to profit and
loss.
All derivative financial instruments are initially measured
at fair value, as per IFRS 13 and IAS
39, and the transaction and associated costs are recognised to the income statement when
incurred. After initial recognition, the financial instruments are measured at fair value.
The methods for the calculation of the Fair Value of these financial instruments, for accounting or
disclosure purposes, are summarised below with regards to the main categories of financial
instruments:
Derivative financial instruments: the pricing models are adopted based on the market
values of the
interest rates;
receivables and payables and non-listed financial assets: for the financial instruments with
maturity greater than 1 year the discounted cash flow method was applied, therefore the
discounting of expected cash flows in consideration of current interest rate conditions and