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MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
4.17. Derivative financial instruments
The Group uses financial derivatives to manage some its interest rate risk exposure.
Cash flow hedges are a hedge of the exposure to variability in cash flows attributable to a par ticular risk associated
with a recognised asset or liability or a highly probable forecast transaction, and could affect profit or loss.The effective
por tion of the gain or loss on the hedging instrument is recognised directly in equity, while the ineffective por tion is
recognised in the consolidated separate income statement.
Amounts taken to equity are transferred to the consolidated income statement when the hedged transaction affects
profit or loss such as when hedged financial income or expense is recognised or when a forecast sale or purchase occurs.
Where the hedged item is the cost of a non-financial asset or liability, the amounts taken to equity are transferred to the
initial carrying amount of the non-financial asset or liability.
If the forecast transaction is no longer expected to occur, the amounts previously recognised in equity are transferred
to the consolidated income statement. If a hedging instrument expires or is sold, terminated or exercised without
replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in equity remain in
equity until the forecast transaction occurs. If the related transaction is not expected to occur, the amount is taken to
income.
The Group’s financial derivatives at 31 December 2011 and 2010 were classified as held for trading, with gains or losses
recognised in the consolidated separate income statement.
4.18. Derecognition of financial assets and liabilities
4.18.1. Financial assets
A financial asset (or, where applicable a par t of a financial asset or par t of a group of similar financial assets) is derecognised
when:
• The rights to receive cash flows from the assets have expired.
• The Group retains the right to receive the cash flows from the asset but has assumed the obligation to pay the
received cash flows in full without material delay to a third par ty under a pass-through arrangement;
• the Group has transferred its rights to receive cash flows from the asset and either (a) the Group has transferred
substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substan-
tially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred
control of the asset, a new asset is recognised to the extent of the Group’s continuing involvement in the asset.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required to
repay.