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The purchase method of accounting has been
used in the preparation of the consolidated financial statements. The excess of the acquisition cost over the Group’s share of acquired
shareholders’ equity is recorded as consolidated
goodwill. Consolidated goodwill is depreciated
according to plan in 3–5 years. The amortisation
period can be 10–15 years when goodwill arises on the acquisition of a strategically important
shareholding in a subsidiary. The important factors in determining the amortisation period are
the size of the business, how well established the
subsidiary is in the market, and the subsidiary’s
future outlook.
The investments in associated companies are
accounted for using the equity method of accounting. The share of profits or losses of associated companies is presented in financial income
and expenses.
The balance sheets of the foreign subsidiaries
are translated into euros at the exchange rates
prevailing at the balance sheet date, while the
profit and loss statements are translated at the
average exchange rates for the period. The effect
of such translation and translation differences
arising from the equities of foreign subsidiaries
are recognised in the retained earnings.
All intragroup transactions, unrealised profits of
deliveries as well as receivables and payables,
and intragroup profit distributions are eliminated
in consolidation.
Minority interest is separated from the Group
shareholders’ equity and profit, and reported as a
separate item in the consolidated financial statements.
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