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FINANCIAL STATEMENTS, MANAGEMENT AND CORPORATE GOVERNANCE REPORT.
2011
4.10. Financial assets
Financial assets are initially recognised at fair value, including, in case investments are not recognised at fair value with
changes in results, general transactions costs.
The Group determines the classification of its financial assets on initial recognition and re-evaluates this designation at
each financial year end.
The financial assets held by the Group companies are classified as:
• Held-to-maturity investments: financial assets with fixed or determinable payments and fixed maturity that the
Group has the positive intention and ability to hold from the date of purchase to the date of maturity. They do
not include loans and accounts receivable originated by the company. After initial measurement held-to-maturity
investments are measured at amor tised cost using the effective interest method.
• Originated loans and receivables: financial assets originated by the companies in exchange for supplying cash, goods
or services directly to a debtor. Loans and receivables are non-derivative financial assets with fixed or determi-
nable payments that are not quoted in an active market. Such financial assets are carried at amor tised cost using
the effective interest rate method. Gains and losses are recognised in the consolidated income statement when
the loans and receivables are derecognised or impaired, as well as through the amor tisation process. Loans and
receivables in the consolidated statement of financial position maturing in 12 months or less from the consolidated
statement of financial position date are classified as current and those maturing in over 12 months as non-current.
• Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are
not classified in any of the three preceding categories. After initial measurement, available-for-sale financial assets are
measured at fair value with unrealised gains or losses recognised directly in equity until the investment is derecog-
nised, at which time the cumulative gain or loss recorded in equity is recognised in the separate income statement,
or determined to be impaired, at which time the cumulative loss recorded in equity is recognised in the separate
income statement.
• Financial assets at fair value through profit and loss: Financial assets classified as held for trading are included in the
category financial assets at fair value through profit and loss. Financial assets are classified as held for trading when
they are acquired for the purpose of selling in the near future. Derivatives are also classified as held for trading
unless they are effective hedging instruments and identified as such. Gains or losses on financial assets held for
trading are recognised in profit or loss.The Group has no held-for-trading financial assets.
The fair value of a financial instrument on a given date is taken to be the amount for which it could be bought or sold
on that date by two knowledgeable, willing par ties in an arm’s length transaction acting prudently. The most objective
and common reference for the fair value of a financial instrument is the price that would be paid for it on an organised,
transparent and deep market (“quoted price” or “market price”). If this market price cannot be determined objectively
and reliably for a given financial instrument, its fair value is estimated on the basis of the price established in recent
transactions involving similar instruments or of the discounted present value of all the future cash flows (collections or
payments), applying a market interest rate for similar financial instruments (same term, currency, interest rate and same
equivalent risk rating).