Basis of presentation

The measurement and recognition criteria applied in this financial report are consistent with those adopted in the consolidated financial statements at 31 December 2010.

It should be noted that, following the completion of the extraordinary transactions consisting in the sale of the companies Rete Rinnovabile S.r.l. and NRTS S.r.l., as described in detail in the section “Significant events” (see above), the balances related to the sale of the companies have been reclassified in accordance with IFRS 5 - Non-current assets held for sale and discontinued operations.

It is also specified that some comparative financial and economic balances of year 2010 have been adjusted to consider the change to the model for booking the effects relating to the release (1) of goodwill made by the Parent Company in 2009. More specifically, the previous model for booking substitute tax (advances on current taxes) has been reviewed in line with the different accounting recognition (prepaid and current taxes) of the substitute tax paid in relation to the release (2) of goodwill resulting from the consolidation of the subsidiary Terna Rete Italia.

More specifically, this restatement has entailed the recording at 31 December 2010 of greater deferred tax assets for an amount of €25.2 million and less tax assets for €12.6 million, with an impact of €14.2 million recognised amongst retained earnings and €1.6 million as a lower result (greater current taxes) on the shareholders’ equity as at 31 December 2010.

(1) Italian Law Decree no. 185 of 29 November 2008, converted into Italian Law no. 2 of 28 January 2009.
(2) Italian Law Decree no. 98 of 6 July 2011, converted with amendments by Italian Law no. 111 of 15 July 2011.