152
Consolidated Financial Statements
Given the current constraints of the financial markets
and despite the goal of placing the gearing ratio in the
range 35% -70%, prudently, in 2012 we have a 19% ratio.
3.2 Estimated fair value
The fair value of financial instruments commercialised
in active markets (such as publicly negotiated deriva-
tives, securities for negotiation and available for sale)
is determined based on the listed market prices on the
consolidated statement of financial position date. The
market price used for the group’s financial assets is the
price received by the shareholders in the current mar-
ket. The market price for financial liabilities is the price
to be paid in the current market.
The nominal value of accounts receivable (minus impair-
ment adjustments) and accounts payable is assumed to
be as approximate to its fair value. The fair value of fi-
nancial liabilities is estimated by updating future cash
flows contracted at the current market interest rate that
is available for similar financial instruments.
4. IMPORTANT ACCOUNTING ESTIMATES AND
JUDGMENTS
Estimates and judgements are continuously evaluated
and are based on past experience and on other factors,
including expectations regarding future events that are
believed to be reasonably probable within the respec-
tive circumstances.
The group makes estimates and outlines premises about
the future. Generally, accounting based on estimates
rarely corresponds to the real reported results. Estimates
and premises that present a significant risk of leading to a
material adjustment in the accounting value of the assets
and liabilities in the following year are described below:
a) Estimated impairment of consolidation differ-
ences
The group performs annual tests to determine wheth-
er the consolidation differences are subject to impair-
ment, according to the accounting policy indicated in
Note 2.5. Recoverable amounts from the units generat-
ing cash flows are determined based on the calculation
of utilisation values. Those calculations require the use
of estimates (Note 9).
If the real gross margin is less, or the discount rate -
prior to taxes - is greater than the estimates by the man-
agers, the impairment losses of the consolidation differ-
ences may be greater than those recorded.
b) Income Tax
The group is subject to Income Tax in Portugal, Spain
and Angola. A significant judgement must be made to
determine the estimated income tax. The large num-
ber of transactions and calculations make it difficult to
determine the income tax during normal business pro-
cedures. The group recognises liabilities for additional
payment of taxes that may originate from reviews by
the tax authorities. When tax audits indicate a final re-
sult different from the initially recorded amounts, the
differences will have an impact on the income tax and
on deferred taxes in the period in which those differ-
ences are identified.
5. INFORMATION ABOUT THE COMPANIES
INCLUDED IN THE CONSOLIDATION AND OTHER
COMPANIES
5.1. The following group companies were
included in the consolidation on 31
st
December 2012 and 2011:
