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Notes to the Consolidated Financial Statements of the Enav Group 79

Business combinations

Business combinations are accounted for by the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration transferred,
measured at fair value at the acquisition date, and the amount of any non-
controlling interest in the acquiree. For every business combination which
does not lead to 100% ownership, the Group measures any non-controlling
interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets. Acquisition costs
are expensed in the year and classified as administrative expenses.

When the Group acquires a business, it classifies or designates the financial
assets acquired or the liabilities assumed in accordance with the pertinent
contractual terms, economic conditions and other factors that exist at the
acquisition date. This includes an assessment to determine whether an
embedded derivative should be separated from the host contract.

If a business combination is achieved in stages, the previously held equity
interest is remeasured at fair value at the acquisition date and any resulting
difference is recognized in profit or loss.

Any contingent consideration requiring recognition is measured by the
acquirer at its fair value at the acquisition date. Changes in the fair value
of contingent consideration classified as an asset or liability, as a financial
instrument that is governed by IAS 39 Financial Instruments: Recognition and
Measurement, are recognized in profit or loss or in other comprehensive
income. If the contingent consideration does not fall within the scope
of IAS 39, it is measured in accordance with the appropriate IFRS. If the
contingent consideration is classified in equity, its carrying amount is not
remeasured and any subsequent settlement is accounted for within equity.

Goodwill is initially recognized at cost, represented by the difference
between the aggregate of the consideration transferred and the carrying
amount of any non-controlling interest and the net identifiable assets
acquiredand the liabilities assumed by the Group. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses. In
order to carry out impairment testing the goodwill acquired in a business
combination is allocated at the acquisition date to each of the Group’s cash-
generating units in which benefits from the synergies of the combination
are expected to arise, regardless of whether the other assets and liabilities
of the entity are allocated to that unit.

If goodwill is allocated to a cash-generating unit and the entity disposes of an
operation within that unit, the goodwill associated with the operation disposed
of is included in the carrying amount of the operation whendetermining the
gain or loss on disposal. The goodwill associated with the operation disposed
of is measured on the basis of the values relative tothe operation disposed of
andthe portion of the cash-generating unit retained.

Each unit or group of units to which goodwill is allocated represents the
lowest level within the Group at which the goodwill is monitored for
internal management purposes.