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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
a.5) Investments in Group companies, joint ventures and associates
This category includes equity investments in group companies, joint ventures and associates.
Upon initial recognition in the balance sheet, the investments are recognised at fair value, which, unless there is evidence
to the contrary, is the transaction price, which is equivalent to the fair value of the consideration paid.
When an investment is newly classified as a group company, joint venture or associate, the carrying amount of that
investment immediately prior to its new classification is taken as the cost of that investment. If applicable, any unrealised
value adjustments to the investment which have been previously recognised directly in equity are left in equity until the
investment is either sold or impaired.
Following initial measurement, these financial assets are measured at cost, less any accumulated impairment loss.
When a value must be assigned to these assets because they are derecognised or for another reason, the homogenous-
groups weighted average cost method is applied, with homogenous groups understood to be those that have the same
rights.Where preferential subscription or similar rights are sold or separated for the purpose of being exercised, the cost
of these rights decreases the carrying amount of the respective assets.
a.6) Available-for-sale financial assets
This category includes debt securities and equity instruments of other companies not classified in any of the preceding
categories.
After initial recognition, these assets are stated at fair value including any transaction costs relating to their sale. Changes
in fair value are recognised directly in equity until the investment is derecognised or determined to be impaired, at
which time the cumulative gain or loss is recognised in the income statement. However, impairment losses and foreign
exchange gains and losses on monetary assets denominated in foreign currency are recognised in the income statement.
Interest, calculated according to the effective interest rate method and dividend income are also recognised in the
income statement.
Investments in equity instruments whose fair value cannot be reliably determined are measured at cost, less any
cumulative impairment.When a value must be assigned to these assets because they are derecognised or for another
other reason, the homogenous-groups weighted average cost method is applied, with homogenous groups understood
to be those that have the same rights. Where preferential subscription or similar rights are sold or separated for the
purpose of exercising being exercised, the cost of these rights decreases the carrying amount of the respective assets.
This amount is the fair value or the cost of the rights consistent with the measurement of the associated financial assets.
B) Interest and dividends received from financial assets
Interest and dividends from financial assets accrued subsequent to acquisition are recognised as income. Interest must
be recognised using the effective interest rate method; dividends are recognised when the right to receive them is
established.
For these purposes, financial assets are recognised separately on initial measurement, based on maturity, accrued explicit
interest receivable at that date, and the proposed dividends at the time the assets are acquired. For these purposes,
explicit interest refers to the contract interest rate applied to the financial instrument.
In addition, when distributed dividends are derived unmistakably from profit generated prior to the date of acquisition
given that the amounts of distributed dividends exceeded the profit generated by the associate since acquisition, the
dividends are not recognised as income and decrease the cost of the investment.