ad pepper media International N.V. ANNUAL

Business / Consolidation

Basis of consolidation The Consolidated Financial Statements comprise the financial statements of ad pepper media International N.V. and its subsidiaries as at 31 December each year. The financial statements of the subsidiaries are prepared for the same reporting year as those of the parent Company, using consistent accounting policies. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control c eases. In a business combination achieved in stages, the Group obtains control of an acquiree in which it held an equity interest immediately before the acquisition date. Such transactio ns are commonly called “step acquisitions”. If the Group increases an existin g equity interest so as to achieve control of the acquiree, the previously held equity interest is remeasured at acquisition-date fair value, and any resulting gain or loss is recognised in profit or loss. All business combinations are accounted for under the acquisition method. In accordance with this method, the purchase price has been allocated to the fair value of the interest held in the net assets of the consolidated subsidiaries at the time of acquisition. In doing so, all identifiable assets, liabilities and contingent liabilities are recognised at fair value and measured accordingly in the consolidated balance sheet. Following adjustments to the fair values of assets acquired and liabilities assumed, any resulting positive difference is capitalised in the balance sheet as goodwill. Situations in which the fair value of net assets is greater than the purchase price paid result in a negative difference (bargain purchase). In the event that such difference remains following reassessment of the allocation of the purchase price or determining the fair value of acquired assets, liabilities, and contingent liabilities, this is recognised immediately as income in profit or lo ss. Acquisition-related costs are expensed as incurred and included in general and administrative expenses. Costs in conjunction with the issu