The preparation of financial statements under IFRS requires certain assumptions and estimations to be made which have an impact on the recognition of assets and liabilities on the Statement of Financial Position and incomes and costs within the Income Statement, as well as information regarding the existence of contingencies. As such, for the preparation of Abengoa’s 2009 and 2008 Consolidated Financial Statements it has occasionally been necessary for Management of the Group and its consolidated entities to make certain estimates – which were subsequently approved by the directors – so as to be able to quantify certain assets, liabilities, incomes and costs and other commitments. Basically, such estimates relate to:
All assumptions and estimates are based upon circumstances and expectations as of the close of the financial period. The most realistic assessment is considered in relation to the global economic situation of the sectors and regions where the Group operates, taking into account the anticipated future development of the businesses. The estimates made may change in the event of changes in matters which impact upon the valuations made. In such cases, the assumptions and the accounting values of assets and liabilities are adjusted.
As of the date of preparing these Consolidated Financial Statements, no relevant changes are anticipated in the estimations made and, as such, no significant changes in the value of such assets and liabilities as at 31 December 2009 are expected.
Despite such estimates being made based upon the use of the best available facts and information as of the date of each accounting close, it is possible that events may occur in the future which require Management to amend the estimates (either at higher or lower) in the following financial periods; which will be done, in accordance with IAS 8, in a prospective way recognising the change in the accounting estimate within the Consolidated Income and Loss Statement.