202/264 Notes to the 2017 consolidated financial statements (c) Basis of consolidation 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 consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. (d) Investment in associates and joint ventures An associate is an entity over which the Group has significant influence but not control or joint control. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Group accounts for its investments in associates and joint ventures using the equity method whereby the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of the associates and joint ventures since the acquisition date. The Group determines, at each reporting date, whether there is objective evidence that the investment in its associated companies or joint ventures is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount and the carrying amount of the investment. Any gain or loss resulting from the dilution of the Group’s interest in associates and joint ventures where significant influence and joint control, respectively, is retained is recognized in the consolidated statement of operations in “Share in earnings of associates and joint ventures.” (e) Foreign currency translation Functional and reporting currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Euro, which is the Group’s reporting currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year­end exchange rates are recognized in the consolidated statement of operations within finance income or finance costs. Group companies The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into Euro as follows: • Assets and liabilities are translated at the closing rate at the reporting date; • Income and expenses for each statement of operation are translated at average exchange rates; and • All resulting exchange differences are recognized in other comprehensive income/(loss). F­9