The preparation of the financial statements and the explanatory notes in application of IFRS requires management to make estimates and assumptions which affect the values of the assets and liabilities in the balance sheet and the disclosures regarding potential assets and liabilities as of the balance sheet date.
The estimates and assumptions used are based on experience and on other factors considered relevant. The actual results could therefore be different from these estimates. Estimates and assumptions are revised periodically and the effects of any changes made to them are reflected in the income statement in the period in which the amendment is made if the revision affects only that period, or even in subsequent periods if the amendment affects both the current year and future periods.
The items of the financial statements mainly affected by the estimation process are the valuation of subsidiaries and associates, deferred taxes and the fair value of financial instruments and stock options.
See the specific areas for further details.