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84 ENAV – 2014 Financial Statements
The ENAV Group is party to certain litigation for which it is not always
possible to predict the final outcome and which in certain casescould end
unfavorably. Provisions have been recognized to cover all the significant
liabilities in the cases in which the Group’s counsel have concluded that
an unfavorable outcome is probable and been able to make a reasonable
estimate of the loss.
Translation of financial statements of foreign operations
The financial statements of subsidiaries expressed in a currency other than
the euro, which is the Group’s functional currency, are translated into euros
in accordance with the following rules:
l assets and liabilities are translated at the closing rate at the balance
sheet date;
l income and expenses are translated at the average exchange rate for
the period, as this is considered to be a reliable approximation to the
result that would be obtained by using the exchange rates at the date
of each transaction;
l the translation reserve, which forms part of consolidated equity,
contains the foreign exchange differences arising from the translation
of profit or loss items at a rate other than that at the balance sheet
date and those arising from the translation of opening net assets
at a rate other than that at the balance sheet date. This reserve is
reclassified to profit or loss on the disposal of the relative investment.
The following table sets out the exchange rates used to translate the
financial statements of companies whose functional currency is not the
euro:
Average exchange rate Exchange rate at
for the year ended 31.12.2014 31.12.2013
31.12.2014 31.12.2013
Malaysian ringgit 4,3472 4,2237 4,2473 4,5221
US dollar 1,3288 0 1,2141 0
Translation of items in foreign currency
Assets and liabilities arising from transactions in a currency other than the
functional currency are recognized at the exchange rate at the date of the
transaction. At year end these assets and liabilities are translated using the
exchange rate at the balance sheet date and the relative exchange gains
and losses are recognized in consolidated profit or loss.
