Los recortes en dependencia y la re-hogarización de los cuidados

that have been transferred to another party yet remain on the entity's statement of financial position. Disclosures are also required to enable a user to understand the amount of any associated liabilities, and the relationship between the financial assets and associated liabilities. Where financial assets have been derecognised but the entity is still exposed to certain risks and rewards associated with the transferred asset, additional disclosures are required to enable the effects of those risks to be under- stood. The amendments affect the presentation of the Group's financial statements.

- IFRS 1 – First-time Adoption of International Financial Reporting Stand- ards. Revisions relating to severe hyperinflation and removal of fixed dates for first-time adopters; and IAS 12 – Income Taxes. Revisions relat- ing to recovery of underlying assets, i.e., investment property measured at fair value. The amendments do not affect the Group’s financial state- ments.

Accounting standards and amendments to existing standards issued that were endorsed by EU but not adopted early by us:

- IFRS 19 – Employee Benefits (effective for annual period beginning on or after 1 January 2013). Amendments relating to recognition and meas- urement of certain benefits and disclosure of all employee benefits. The amendments will not affect the Group’s financial statements.

- IAS 1 (amendment) – Presentation of Financial Statements (effective for annual periods beginning on or after 1 July 2012). The amendments re- tain the option to present profit or loss and other comprehensive in- come in either a single statement or in two separate but consecutive statements. However, the amendments require additional disclosures to be made in the other comprehensive income section such that items of other comprehensive income are grouped into two categories: items that will not be reclassified subsequently to profit or loss; and items that will be reclassified subsequently to profit or loss when specific condi- tions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. The amendments affect the

39 AnnuAl report 2012 PRVI FAKTOR GROuP

presentation of the Group's consolidated financial statements

- IFRS 7 (amendment) – Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2013). The amendment requires additional disclosures to allow financial statement users to better assess the effect or potential effect of offsetting arrange- ments, including gross settlement. The amendments affect the presen- tation of the Group's financial statements.

- IAS 32 (amendment) – Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2014). The amendment added application guidance to IAS 32 to address inconsist- encies identified in applying some of the offsetting criteria. It clarifies the meaning of currently and legally enforceable right to set-off and that some gross settlement systems may be considered equivalent to net set- tlement.

- IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities, a revised version of IAS 27 Separate Financial Statements which has been amended for the is- suance of IFRS 10 but retains the current guidance for separate financial statements, and a revised version of IAS 28 Investment in Associates and Joint Ventures, which has been amended for conforming changes based on the issuance of IFRS 10 and IFRS 11. Standards are effective for annual periods beginning on or after 1 January 2014, with earlier application permitted as long as each of the other standards is also applied early. However, entities are permitted to include any of the disclosure require- ments in IFRS 12 into their consolidated financial statements without early adopting IFRS 12. The Group is currently evaluating the potential impact that the adoption of the standards will have on its consolidated financial statements.

- IFRS 10 (new standard). The new standard replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consoli- dated financial statements. SIC-12 Consolidation – Special Purpose En- tities was withdrawn upon the issuance of IFRS 10. Under IFRS 10, there

is only one basis for consolidation, that is control. In addition, IFRS 10 includes a new definition of control that contains three elements: power over an investee, exposure, or rights, to variable returns from its involve- ment with the investee, and the ability to use its power over the investee to affect the amount of the investor's returns. Extensive guidance has been added in IFRS 10 to deal with complex scenarios.

- IFRS 11 (new standard). The new standard replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. SIC-13 Jointly Controlled Entities – Non-monetary Contributions by Ventur- ers was withdrawn upon the issuance of IFRS 11. Under IFRS 11, joint arrangements are classified as joint operations or joint ventures, de- pending on the rights and obligations of the parties to the arrange- ments. In contrast, under IAS 31, there are three types of joint arrange- ments: jointly controlled entities, jointly controlled assets and jointly controlled operations. In addition, joint ventures under IFRS 11 must be accounted for using the equity method of accounting, whereas jointly controlled entities under IAS 31 may be accounted for using the equity method of accounting or proportionate accounting.

- IFRS 12 (new standard). The new standard is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than those required in the current standards.

- IFRS 13 (new standard) – Fair Value Measurement (effective for annual periods beginning on or after 1 January 2013). The standard establishes a single source of guidance for fair value measurements and disclo- sures about fair value measurements. The standard defines fair value, establishes a framework for measuring fair value, and requires disclo- sures about fair value measurements. The scope of standard is broad; it applies to both financial instrument items and non-financial instrument items for which other standards require or permit fair value measure- ments and disclosures about fair value measurements, except in speci-

PRVI FAKTOR GROuP AnnuAl report 2012 40

fied circumstances. In general, the disclosure requirements in IFRS 13 are more extensive than those required in the current standards. For exam- ple, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only under IFRS 7 Financial Instruments: Disclosures will be extended by IFRS 13 to cover all assets and liabilities within its scope. The Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

- Other revised standards, amendments and interpretations: amendment to IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine. The amendment will not affect the Group’s financial statements. Accounting standards and amendments to existing standards issued but not yet endorsed by EU:

- IFRS 9 – Financial Instruments. IFRS 9 issued in November 2009 replaces those parts of IAS 39 relating to the classification and measurement of financial assets. IFRS 9 was further amended in October 2010 to address the classification and measurement of financial liabilities. Its key require- ments are the following:

- Financial assets are required to be classified into two measurement categories: those to be measured subsequently at fair value, and those to be measured subsequently at amortised cost. The decision is to be made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments.

- An instrument is subsequently measured at amortized cost only if it is a debt instrument and both (i) the objective of the entity’s business model is to hold the asset to collect the contractual cash flows, and (ii) the asset’s contractual cash flows represent only payments of principal and interest (i.e. it bear only “basic loan features”). All other debt instru- ments are to be measured at fair value through profit or loss.

- All equity instruments are to be measured subsequently at fair value.

Equity instruments that are held for trading will be measured at fair val- ue through profit or loss. All other equity investments will be measured at fair value through other comprehensive income with no recycling to profit or loss. Dividends are to be presented in profit or loss, as long as they represent a return on investment.

- Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The key change is that an entity will be required to present the effects of changes in own credit risk of financial liabilities designated as at fair value through profit or loss in other comprehensive income.

- Adoption of IFRS 9 is mandatory from January 1, 2015, with earlier adoption permitted. The Group is considering the implications of the standard and the timing of its adoption.

- Amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities – Transi- tion Guidance (effective for annual periods beginning on or after 1 Janu- ary 2014). Amendments were issued to ease transition to new standards by restrictions of requirements regarding assurance of adjusted compa- rable data for comparable period.

- Amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities – Invest- ment Entities (effective for annual periods beginning on or after 1 Janu- ary 2014). Amendments include the creation of a definition of an invest- ment entity, the requirement that such entities measure investment in subsidiaries at fair value through profit and loss instead of consolidating them, new disclosure requirements for investment entities and require- ments for an investment entity’s separate financial statements.

- Annual improvements to IFRS 2009-2011. The improvements consist of a mixture of substantive changes and clarifications and are affective for annual periods beginning on or after 1 January 2013. Amendments to IFRS 1 Fist time Adoption of International Financial Reporting Standards

41 AnnuAl report 2012 PRVI FAKTOR GROuP

include explanations of additional comparative information disclosures. If additional comparative information is provided, the information should include disclosure of comparative information for any additional state- ments included beyond the minimum comparative financial statement requirements. Presenting additional comparative information voluntar- ily would not trigger a requirement to provide a complete set of financial statements. Amendments to IAS 16 Property, plant and equipment classi- fies spare parts, stand-by equipment and servicing equipment as property, plant and equipment when they meet the definition of property, plant and equipment in IAS 16 and as inventory otherwise. Amendments to IAS 32 Financial Instruments: Presentation require that income tax relating to dis- tributions to holders of an equity instrument and to transaction costs of an equity transaction should be accounted for in accordance with IAS 12 Income Taxes Amendments to IAS 34 Interim Financial Reporting require separate disclosure of total assets and total liabilities for a particular re- portable segment in interim financial reporting in accordance with IFRS 8 Operating Segments only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amounts disclosed in the last annual financial statements for that reportable segment. Amendments to MRS 1 First-time Adoption of International Financial Reporting Standards require that borrowing costs incurred on or after the date of transition to IFRSs that relate to qualifying assets under construction at the date of transition should be accounted for in accordance with IAS 23 Borrowing Costs.

- IFRS 1 – Fist time Adoption of IFRS, relating to prospective application re- lated to government loans will not affect the Group’s financial statements.

4.2.2 Consolidation

Subsidiaries – those companies in which the parent (controlling) company, directly or indirectly, has more than half of the voting rights or otherwise has power to exercise control over the operations – have been fully consolidated. Subsidiaries are consolidated from the date the actual control is transferred to the Group, and are no longer consolidated when this control ceases.

All intra-Group transactions and balances, as well as all unrealised gains arising from such transactions, have been eliminated, the same as all unre- alised losses, except for those arising on impairment of assets transferred. The full consolidation method has been used to ensure compliance with IFRS, as adopted by the European Union.

4.2.3 Foreign currency translation

(i) Functional and presentation currency

Items reported in these consolidated financial statements are measured using the currency of the primary economic environment in which the en- tity operates (the functional currency). The consolidated financial state- ments are presented in euros (EUR).

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates ruling on the date of the transaction. Foreign ex- change gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognised in the state- ment of comprehensive income.

Exchange rate differences arising from the translation of non-monetary items are recognised as part of the fair value gain or loss.

(iii) Group companies

Transactions and balances of all Group companies having a functional cur- rency different from the presentation currency are translated in the follow- ing way:

- assets and liabilities reported in each statement of financial position are translated using the exchange rate ruling at the statement of financial position date;

- income and expenses reported in each statement of comprehensive in- come are translated using the average exchange rate ruling in the state-

PRVI FAKTOR GROuP AnnuAl report 2012 42

ment of comprehensive income period;

- any exchange rate differences so arising are recognised as a special item under equity.

In consolidation, exchange rate differences arising from the translation of interests and debts are recognised in equity. On disposal of such inter- ests, they are recognised in the statement of comprehensive income under gains/losses arising on disposal.

4.2.4 Intangible assets

Intangible assets comprise computer software licences. These assets are capitalised on the basis of costs incurred to acquire and bring to use the specific software. These costs are amortised over the estimated useful life of such software (4 years).

Intangible assets are carried at cost, less accumulated amortisation and impairment losses.

Amortisation of intangible assets starts upon their availability for use.

4.2.5 Property, plant and equipment

An item of property, plant and equipment is recognised in the statement of financial position at historical cost less accumulated depreciation and impairment. The cost of an item of property, plant and equipment includes expenditure that is directly attributable to its acquisition.

Subsequent costs are included in the assets' carrying amount or recog- nised as a separate asset, as appropriate, but only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are recognised in the statement of comprehensive in- come during the financial period in which they are incurred.

Property, plant and equipment are depreciated using the straight line method.

Annual depreciation rates based on the useful life of assets were as follows in 2012:

Leasehold improvements 12.24% to 20.00%

Computer equipment 25%

Motor vehicles 20%

Other equipment 20%

Depreciation of property, plant and equipment starts upon their availability for use.

An assets’ carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recover- able amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amounts. They are recognised in the statement of comprehensive income.

4.2.6. Investment property

Investment property is property that the Group does not use directly in the carrying out of its activities, but holds to earn rental income. Investment property is measured at fair value determined by a certified appraiser and based on market prices. Any gains or losses arising on measurement at fair value are recognised in the statement of comprehensive income. If the intended use of investment property changes, this shall be transferred to owner-occupied assets.

43 AnnuAl report 2012 PRVI FAKTOR GROuP

4.2.7 Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial instruments with fixed or determinable payments and fixed maturity not quoted in an active market. They are recognised at amortised cost using the effective interest method. The Group intends to hold these assets until maturity. Should this not be the case, the Group would have to reclassify the entire category as available-for-sale.

Allowances shall be established or impairments losses recognised if the Group assesses that certain financial assets cannot be collected in accord- ance with the contractual provisions and expects losses to occur. Impair- ments of held-to-maturity financial assets are recognised in the same mat- ter as those for loans and receivables (see note 4.2.8 below).

4.2.8 Loans and receivables

Loans and receivables are initially recognised at fair value, increased by any directly attributable transaction costs. Subsequently they shall be meas- ured at amortised cost using the effective interest method. In the state- ment of financial position, loans and receivables are classified as either cur- rent (short-term) or non-current (long-term) assets.

Advances shall be recognised in the statement of financial position under items to which they relate: advance payments for equipment are shown under equipment, advance payments for intangible assets are shown under intangible assets, while advance payments for inventories are shown under inventories Receivables arising from recourse factoring are included in the statement of financial position at their net value, i.e., at the amount of cash provided in exchange for accounts receivable purchased. Receivables aris- ing from non-recourse factoring are included at their gross value.

Individually significant loans and receivables that show signs of impairment are impaired individually, while others are impaired collectively. An indi- vidually assessed loan or receivable not showing signs of impairment is

included in a group of loans and receivables with similar credit risk charac- teristics and impaired collectively.

Allowances shall be established or impairments losses recognised if the Group assesses that certain receivables cannot be collected in accordance with the contractual provisions and therefore expects losses to occur. Evi- dence must exist of impairment, such as:

• significant financial difficulties of the debtor, • a breach of contractual obligations by the debtor,

• concessions granted due to financial difficulties of the debtor,

• probable or existing bankruptcy or financial reorganisation of the debtor, • unfavourable changes in the debt repayment pattern by the debtor, • unfavourable changes in economic conditions that affect debt repay-

ment by the debtor.

The allowance or impairment amount shall be estimated for individually significant loans and receivables using an item-by-item approach. Collective impairments are recognised based on the average of receivables reclassified from previously unimpaired to impaired in the last four quarters. Using an item-by-item approach, the Group may write off loans and re- ceivables with a fair or collectable value that is unquestionably zero.