Page 137 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

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FINANCIAL STATEMENTS AND MANAGEMENT. ANNUAL CORPORATE GOVERNANCE REPORT. BALANCE SHEETS 2012
4.12. Inventories
The cost of producing in-house productions is determined taking into account all the costs allocable to the product
incurred by the Group. Advances paid for programmes are also included.
The production costs are expensed when the related programmes are broadcast.
4.13. Cash equivalents
The cash equivalents comprise mainly short-term deposits,short-termmarketable bills and notes,short-term government
bonds and other money market assets maturing at three months or less.
4.14. Grants
The amounts received are recognized where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with.
The difference between the nominal value and the fair value of the loan is deducted from the carrying amount of the
related asset and is allocated to the separate income statement according to financial criteria.
4.15.Treasury shares
Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. No
gain or loss is recognized in the separate income statement on the purchase, sale, issue or cancellation of the parent’s
own equity instruments. Voting rights related to treasury shares are nullified for the Group and no dividends are
allocated to them.
4.16. Financial liabilities
Financial liabilities are initially measured at fair value less attributable transaction costs. Following initial recognition,
financial liabilities are measured at amortized cost, with any differences between cost and redemption value recognized
in the consolidated separate income statement over the period of the borrowings, using the effective interest rate
method.
Liabilities maturing in less than 12 months from the consolidated statement of financial position date are classified as
current, while those with longer maturity periods are classified as non-current.
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 particular risk associated
with a recognized asset or liability or a highly probable forecast transaction, and could affect profit or loss.The effective
portion of the gain or loss on the hedging instrument is recognized directly in equity, while the ineffective portion is
recognized in the separate income statement.
Amounts taken to equity are transferred to the separate income statement when the hedged transaction affects profit
or loss such as when hedged financial income or expense is recognized or when a forecast sale or purchase occurs.