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Notes to the Consolidated Financial Statements of the Enav Group 91

but which are observable in the market, either directly or
indirectly;
Level 3: financial assets and liabilities whose fair value is determined on
the basis of unobservable market data.

Loans, trade payables and other financial liabilities

Loans, trade payables and other financial liabilities are initially recognized
at cost, corresponding to the fair value of liabilities, less any directly
attributable transaction costs, and are subsequently measured at
amortized cost using the effective interest method less any impairment
losses. Loans, trade payables and other financial liabilities are classified
as current liabilities unless they have a contractual due date exceeding
twelve months from the balance sheet date when they are classified as
non-current liabilities.

Employee benefits

Liabilities for short-term employee benefits paid during the employment
relationship are measured at the amount that has accrued at the balance
sheet date and allocationsare classified as personnel costs.

The ENAV Group is party to both defined contribution plans and defined
benefit plans. The defined contribution plans are managed by third party
fund managers with respect to whom the Group has no obligations and to
whom it pays over contractually agreed contributions which are recognized
as personnel costs on an accrual basis.

The defined benefit plan consists of the Italian employees’ leaving
entitlement scheme (Trattamento di Fine Rapporto or TFR), with the relative
amounts accrued through 31 December 2006; in accordance with Law no.
296 of 27 December 2006, on the basis of the implicit and explicit decisions
taken by the workers the amounts accruing after that date are transferred
to supplementary pension schemes or the treasury fund managed by
the Italian national social security organization INPS. In the case of the
defined benefit plan, the amount of the benefit due to employees can only
be quantified after the termination of the employment relationship and is
based on a series of factors such as age, the number of years of service
and salary levels. The obligations deriving from this plan are calculated
by an independent actuary using the projected unit credit method. The
liability recognized in the financial statements accordingly coincideswith
the actuarial valuation and any actuarial gains or losses arising from the
calculation are recognized in other comprehensive income in the period in
which they arise, taking into account the deferred tax effect.