The Group’s functional currency is the euro, which is the currency in which its financial statements are prepared and published.
The companies of the Group prepare their financial statements in the currencies that are used in their respective countries.
Transactions carried out in foreign currencies are initially recognized at the spot exchange rate on the date of the transaction.
At the balance sheet date monetary assets and liabilities denominated in foreign currencies are translated at the spot exchange rate prevailing on that date.
Non-monetary items measured at historical cost in a foreign currency are translated using the historical exchange rate prevailing on the date of the transaction.
Non-monetary items measured at fair value are translated using the spot exchange rate at the date on which the measurements are determined for the financial statements.
The assets and liabilities of the companies within the Group whose functional currency is not the euro are valued using the following procedures:
- assets and liabilities are translated using the spot exchange rate prevailing at the balance sheet date;
- costs and revenues are translated using the average exchange rate for the period;
Exchange rate differences are recognized directly to a special equity reserve.
Should an investment in a foreign operation be sold, the accumulated exchange rate differences recognized in the equity reserve are reversed to the income statement.