therefore no goodwill is recognised as a result of such transactions. On an  acquisition by acquisition basis, the Group recognises any non-controlling  interest in the acquiree either at fair value or at the non-controlling interest’s  proportionate share of the acquiree’s net assets. where some or all of the goodwill allocated to a particular cash-generating unit  arose in respect of that combination, the cash-generating unit is tested for  impairment prior to the end of the relevant annual period.  Property, plant and equipment assets are reviewed for potential impairment by  applying a series of external and internal indicators specific to the assets  under consideration; these indicators encompass macroeconomic issues  including the inherent cyclicality of the building materials sector, actual  obsolescence or physical damage, a deterioration in forecast performance in  the internal reporting cycle and restructuring and rationalisation programmes. Where the carrying value exceeds the estimated recoverable amount (being  the greater of fair value less costs to sell and value-in-use), an impairment loss  is recognised by writing down the assets to their recoverable amount. In  assessing value-in-use, the estimated future cash flows are discounted to  their present value using a pre-tax discount rate that reflects current market  assessments of the time value of money and the risks specific to the asset for  which the future cash flow estimates have not been adjusted. The estimates  of future cash flows exclude cash inflows or outflows attributable to financing  activities and income tax. For an asset that does not generate largely  independent cash inflows, the recoverable amount is determined by reference  to the cash-generating unit to which the asset belongs. Impairment losses  arising in respect of goodwill are not reversed once recognised. Loans to joint ventures (after proportionate elimination) are classified as loans  and receivables within financial assets and are recorded at amortised cost. The Group’s share of results and net assets of joint ventures (jointly controlled  entities which are entities in which the Group holds an interest on a long-term  basis and which are jointly controlled by the Group and one or more other  venturers under a contractual arrangement) are accounted for on the basis of  proportionate consolidation from the date on which the contractual agreements  stipulating joint control are finalised and are derecognised when joint control  ceases. The Group combines its share of the joint ventures’ individual income  and expenses, assets and liabilities and cash flows on a line-by-line basis with  similar items in the Consolidated Financial Statements. Goodwill relating to associates is included in the carrying amount of the  investment and is neither amortised nor individually tested for impairment.  Where indicators of impairment of an investment arise in accordance with the  requirements of IAS 39  Financial Instruments: Recognition and Measurement ,  the carrying amount is tested for impairment by comparing its recoverable  amount with its carrying amount. Entities other than subsidiaries and joint ventures in which the Group has a  participating interest, and over whose operating and financial policies the Group is  in a position to exercise significant influence, are accounted for as associates  using the equity method and are included in the Consolidated Financial Statements  from the date on which significant influence is deemed to arise until the date on  which such influence ceases to exist. Under the equity method, the Consolidated  Income Statement reflects the Group’s share of profit after tax of the related  associates. Investments in associates are carried in the Consolidated Balance  Sheet at cost adjusted in respect of post-acquisition changes in the Group’s share  of net assets, less any impairment in value. If necessary, impairment losses on the  carrying amount of an investment are reported within the Group’s share of  associates’ profit after tax in the Consolidated Income Statement. If the Group’s  share of losses exceeds the carrying amount of an associate, the carrying amount  is reduced to nil and recognition of further losses is discontinued except to the  extent that the Group has incurred obligations in respect of the associate. The impairment testing process requires management to make significant  judgements and estimates regarding the future cash flows expected to be  generated by the use of and, if applicable, the eventual disposal of, long-lived  assets and goodwill as well as other factors to determine the fair value of the  assets. Management periodically evaluates and updates the estimates based  on the conditions which influence these variables. A detailed discussion of the  impairment methodology applied and key assumptions used by the Group in  the context of long-lived assets and goodwill are provided in Notes 14 and 15  to the Consolidated Financial Statements.  Intra-group balances and transactions, income and expenses, and any unrealised  gains or losses arising from such transactions, are eliminated in preparing the  Consolidated Financial Statements. Unrealised gains arising from transactions  with joint ventures and associates are eliminated to the extent of the Group’s  interest in the entity. Unrealised losses are eliminated in the same manner as  unrealised gains, but only to the extent that there is no evidence of impairment in  the Group’s interest in the entity. The assumptions and conditions for determining impairments of long-lived  assets and goodwill reflect management’s best assumptions and estimates,  but these items involve inherent uncertainties described above, many of which  are not under management’s control. As a result, the accounting for such  items could result in different estimates or amounts if management used  different assumptions or if different conditions occur in future accounting  periods.  Transactions eliminated on consolidation Revenue recognition Other Significant Accounting Policies Basis of consolidation Joint ventures – Note 2 Associates – Note 10 Construction contracts Subsidiaries Revenue represents the value of goods and services supplied and is net of  trade discounts and value added tax/sales tax. Other than in the case of  construction contracts, revenue is recognised to the extent that revenue and  related costs incurred or to be incurred are subject to reliable measurement,  that it is probable that economic benefits will flow to the Group and that the  significant risks and rewards of ownership have passed to the buyer, usually  on delivery of the goods.  The Consolidated Financial Statements include the financial statements of the  Parent Company and all subsidiaries, joint ventures and associates, drawn up  to 31 December each year. The financial year-ends of the Group’s subsidiaries,  joint ventures and associates are co-terminous. The financial statements of subsidiaries are included in the Consolidated  Financial Statements from the date on which control over the operating and  financial decisions is obtained and cease to be consolidated from the date on  which the Group loses control. The existence and effect of potential voting  rights that are currently exercisable or convertible are considered in determining  the existence or otherwise of control. A change in the ownership interest of a  subsidiary, without a change of control, is accounted for as an equity  transaction. Non-controlling interests represent the portion of the equity of a subsidiary not  attributable either directly or indirectly to the Parent Company and are  presented separately in the Consolidated Income Statement and within equity  in the Consolidated Balance Sheet, distinguished from Parent Company  shareholders’ equity. Acquisitions of non-controlling interests are accounted  for as transactions with equity holders in their capacity as equity holders and  The Group engages primarily in the performance of fixed price contracts, as  opposed to cost plus contracts, and recognises revenue in accordance with the  percentage-of-completion method, with the completion percentage being  computed generally by reference to the proportion that contract costs incurred  at the balance sheet date bear to the total estimated costs of the contract.  Contract costs are recognised as incurred. When the outcome of a construction  contract can be estimated reliably and it is probable that the contract will be  profitable, contract revenue is recognised over the period of the contract. When  the outcome of a construction contract cannot be estimated reliably, contract  revenue is recognised only to the extent of contract costs incurred where it is  probable that these costs will be recoverable. When it is probable that total  contract costs will exceed total contract revenue, the expected loss is  recognised immediately as an expense. Revenue and/or costs in respect of  variations or contracts claims and incentive payments, to the extent that they  arise, are recognised when it is probable that the amount, which can be  measured reliably, will be recovered from/paid to the customer.  CRH 79