Accounting Policies  |  continued Segment reporting – Note 1 Business combinations – Note 31 Share-based payments – Note 8  Goodwill – Note 15 80 CRH If circumstances arise that may change the original estimates of revenues, costs  or extent of progress towards completion, estimates are revised. These revisions  may result in increases or decreases in revenue or costs and are reflected in  income in the period in which the circumstances that give rise to the revision  became known by management. Operating segments are reported in a manner consistent with the internal  organisational and management structure and the internal reporting information  provided to the Chief Operating Decision-Maker who is responsible for allocating  resources and assessing performance of the operating segments.  The Group operates both Share Option Schemes and a Performance Share  Plan. Its policy in relation to the granting of share options and the granting of  awards under the Performance Share Plan together with the nature of the  underlying market and non-market performance and other vesting conditions are  addressed in the Report on Directors’ Remuneration on page 59. The Group’s  employee share options and shares awarded under the Performance Share Plan  are equity-settled share-based payments as defined in IFRS 2  Share-Based  Payment . The fair value of shares awarded under the Performance Share Plan is determined  using a Monte Carlo simulation technique and is expensed in the Consolidated  Income Statement over the vesting period. The Performance Share Plan contains  inter alia a total shareholder return-based (and hence market-based) vesting  condition; accordingly, the fair value assigned to the related equity instruments at  the grant date is adjusted so as to reflect the anticipated likelihood as at the grant  date of achieving the market-based vesting condition. Awards are treated as  vesting irrespective of whether or not the market condition is satisfied, provided  that all other performance and/or service conditions are satisfied. For share option awards, the Group measures the services received and the  corresponding increase in equity at fair value at the grant date using the trinomial  model (a lattice option-pricing model in accordance with IFRS 2). Fair value is  determined on the basis that the services to be rendered by employees as  consideration for the granting of share options will be received over the vesting  period, which is assessed as at the grant date. The share options granted by the  Company are at market value at date of grant and are not subject to market- based vesting conditions within the meaning of IFRS 2. The cost is recognised, together with a corresponding increase in equity, over the  period in which the performance and/or service conditions are fulfilled. The  cumulative expense recognised at each reporting date until the vesting date  reflects the extent to which the vesting period has expired and the Group’s best  estimate of the number of equity instruments that will ultimately vest. The  Consolidated Income Statement expense/credit for a period represents the  movement in cumulative expense recognised at the beginning and end of that  period. The cumulative charge to the Consolidated Income Statement is reversed  only where the performance condition is not met or where an employee in receipt  of share options leaves service prior to completion of the expected vesting period  and those options forfeit in consequence.  The Group applies the acquisition method in accounting for business  combinations. The cost of an acquisition is measured as the aggregate of the  consideration transferred (excluding amounts relating to the settlement of pre- existing relationships), the amount of any non-controlling interest in the acquiree  and, in a business combination achieved in stages, the acquisition-date fair value  of the acquirer’s previously-held equity interest in the acquiree. Transaction costs  that the Group incurs in connection with a business combination are expensed  as incurred. To the extent that settlement of all or any part of a business combination is  deferred, the fair value of the deferred component is determined through  discounting the amounts payable to their present value at the date of exchange.  The discount component is unwound as an interest charge in the Consolidated  Income Statement over the life of the obligation. Where a business combination  agreement provides for an adjustment to the cost of the combination contingent  on future events, the amount of the adjustment is included in the cost at the  acquisition date at fair value. The fair value of contingent consideration at  acquisition date is arrived at through discounting the expected payment (based  on scenario modelling) to present value. In general, in order for contingent  consideration to become payable, pre-defined profit and/or profit/net asset ratios  must be exceeded. Subsequent changes to the fair value of the contingent  consideration will be recognised in profit or loss unless the contingent  consideration is classified as equity, in which case it is not remeasured and  settlement is accounted for within equity. No expense is recognised for awards that do not ultimately vest, except for  share-based payments where vesting is conditional upon a non-vesting condition  which is treated as vesting irrespective of whether or not it is satisfied, provided  that all other performance and/or service conditions are satisfied. Where an award is cancelled, it is treated as if it is vested on the date of  cancellation, and any expense not yet recognised for the award is recognised  immediately. This includes any award where non-vesting conditions within the  control of either the Company or the employee are not met. All cancellations of  awards are treated equally.  The proceeds received net of any directly attributable transaction costs are  credited to share capital (nominal value) and share premium when the options are  exercised. The dilutive effect of outstanding options is reflected as additional share dilution  in the determination of diluted earnings per share. To the extent that the Group receives a tax deduction relating to the services paid  in shares, deferred tax in respect of share options is provided on the basis of the  difference between the market price of the underlying equity as at the date of the  financial statements and the exercise price of the option; where the amount of  any tax deduction (or estimated future tax deduction) exceeds the amount of the  related cumulative remuneration expense, the current or deferred tax associated  with the excess is recognised directly in equity. The Group has no exposure in respect of cash-settled share-based payment  transactions and share-based payment transactions with cash alternatives. Where a subsidiary is disposed of or terminated through closure, the carrying  value of any goodwill which arose on acquisition of that subsidiary is included in  the determination of the net profit or loss on disposal/termination. Goodwill applicable to jointly controlled entities is accounted for on the basis of  proportionate consolidation and is therefore included in the goodwill caption in  the Consolidated Balance Sheet, net of any impairment. The carrying amount of  goodwill in respect of associates is included in investments in associates (i.e.  within financial assets) under the equity method in the Consolidated Balance  Sheet. Goodwill arising on a business combination is initially measured at cost being the  excess of the cost of an acquisition over the net identifiable assets and liabilities  assumed at the date of acquisition and relates to the future economic benefits  arising from assets which are not capable of being individually identified and  separately recognised. Following initial recognition, goodwill is measured at cost  less any accumulated impairment losses. If the cost of the acquisition is lower  than the fair value of the net assets of the subsidiary acquired, the identification  and measurement of the related assets and liabilities and contingent liabilities are  revisited and the cost is reassessed with any remaining balance recognised  immediately in the Consolidated Income Statement.  The assets and liabilities (and contingent liabilities, if relevant) arising on business  combination activity are measured at their acquisition-date fair values. In the case  of a business combination achieved in stages, the acquisition-date fair value of  the acquirer’s previously-held equity interest in the acquiree is remeasured to fair  value as at the acquisition date through profit or loss. When the initial accounting  for a business combination is determined provisionally, any adjustments to the  provisional values allocated to the identifiable assets and liabilities (and contingent  liabilities, if relevant) are made within the measurement period, a period of no  more than one year from the acquisition date. Share options Awards under the Performance Share Plan