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CONSOLIDATED FINANCIAL STATEMENTS
a) Estimated impairment of goodwill
The group performs annual tests to determine wheth-
er the goodwill is subject to impairment, according to
the accounting policy indicated in Note 2.5. Recoverable
amounts from the units generating cash flows are de-
termined 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 - af-
ter taxes - is greater than the estimates by the manag-
ers, the impairment losses of the goodwill may be great-
er 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 number
of transactions and calculations make it difficult to deter-
mine the income tax during normal business procedures.
The group recognises liabilities for additional payment of
taxes that may originate from reviews by the tax authori-
ties. When tax audits indicate a final result 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 differences are identified.
c) Provisions
The group on a periodic basis examines possible obliga-
tions arising from past events that should be recognized
or disclosed.
The subjectivity inherent in determining the probabili-
ty and amount of internal resources required to settle
these obligations may result in significant adjustments
due to changes in the assumptions used or the future
recognition of provisions previously disclosed as contin-
gent liabilities.
d) Fixed tangible and intangible assets
The determination of lifetime period of the assets and
the depreciation method to be applied, is essential to
determine the amount of depreciation to be recognized
in the income statement for each year.
According to the best judgment of the Board of Direc-
tors and considering the practices adopted by compa-
nies in the sector internationally these two parameters
are set for the assets and business in question.
