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Notes to the Consolidated Financial Statements of the Enav Group 83

Deferred taxes

Deferred tax assets are recognized for all deductible temporary differences
and any tax losses to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences and/or
tax losses can be utilized. Management is required to make a significant
discretional assessment to determine the amount of deferred tax assets
that can be recognized. The probable timing and amount of future taxable
profits has to be estimated as well as a future tax planning strategy.

The directors believe that the recovery of the balance stated in the financial
statements is highly probable; nevertheless, should it be noticed that the
Group is unable to recover all or part of recognized deferred tax assets in
future years, the resulting adjustment is recognized in profit or loss in the
period in which this circumstance occurs.

Other items

The following financial statement items are affected by management’s
estimates and assumptions:

l the allowance for inventory losses;
l the bad debts allowance;
l the determination of useful lives for calculating depreciation and

amortization;
l employee benefits;
l provisions for risks and charges.

The bad debts allowance and the allowance for inventory losses respectively
reflect estimates of the Group’s bad debt losses and of the amount of
spare parts that have become obsolete and can no longer be used for
the systems and equipment to which they relate. Although it is believed
that these allowances are reasonable, the use of different assumptions or
a change in economic conditions could lead to changes and accordingly
have an effect on results.

The useful lives allocated to assets reflects the estimate made by management
of the period of time over which it is expected that each individual asset can
be used by the Group. Changes in economic conditions or in the assumptions
underlying the estimate could affect the determination of the depreciation or
amortizationrecognized in profit or loss.

The calculation of the costs and liabilities associated post employments
benefits in Italy (TFR) are based on estimates made by actuarial experts,
who use a combination of statistical and actuarial factors such as
data relating to previous years and forecasts of future costs, as well as
assumptions regarding changes in discount rates, future salary levels and
variations in inflation rates. These estimates could differsignificantly from
the actual results due to the way in which such factors evolve, and have an
effect on the quantification of the relative costs.