140 / 214
140
MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
4. ACCOUNTING POLICIES
The principal accounting policies used in preparing the Group’s consolidated financial statements were as follows:
4.1. Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries at December
31, 2015. Control is obtained when the Group is exposed, or has the rights attached to variable returns arising from
its involvement in a subsidiary, and is able to influence them as a result of the exercise of power over the subsidiary.
Specifically, the Group has control of a subsidiary if, and only if it has:
• Power over the subsidiary (existing rights allowing it to manage relevant subsidiary activities).
• Exposure, or rights, to variable returns from its involvement with the other company.
• The ability to use its power over the other company to affect the amount of the company’s return.
Generally, it is presumed that the majority of voting rights grants
control.Tosupport the presumption, when the Group
does not have the majority of the voting or other similar rights over the subsidiary, the Group considers all relevant facts
and circumstances to evaluate whether it has control, which includes:
• Contractual agreements with other owners with regard to the subsidiary’s voting rights.
• Rights arising from other contractual agreements.
• The Group’s potential voting rights.
The Group reevaluates whether or not it has control over a subsidiary if facts and circumstances indicate that there
are changes in one or more of the items determining control. Consolidation of a subsidiary commences the moment
a Group obtains control over it, and ends when the Group loses control.The assets, liabilities, income, and expenses of
a subsidiary which has been acquired or sold during the year are recognized on the consolidated financial statements
commencing the date the Group acquires control, or until it loses it.
Profits or losses and each of the items included in the components of comprehensive income are attributed to
the owners of the Group’s parent’s shares, and external partners, even when this implies that the non-controlling
shareholders have amounts receivable as a result.When considered necessary, adjustments are made to the subsidiaries’
financial statements so that their accounting criteria coincide with those which are applicable to the Group. All of the
assets, liabilities, equity, income, expenses, and cash flow arising from transactions between Group companies are totally
eliminated during the consolidation process.
A change in the percentage of ownership held in a subsidiary, without loss of control, is recognized as an equity
transaction.
When the Group loses control of a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-
dominant equity interests, and other equity components, recognizing any profit or loss as results for the year. Any
investments in the prior subsidiary are recognized as fair value.
All items of property, plant, and equipment, and intangible assets are linked to production and the generation of revenue
from business activities.