Page 140 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

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MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
• Where the deferred income tax relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss.
• In respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred
tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary difference can be utilized.
The carrying amount of deferred income tax assets is reviewed at each statement of financial position date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred income tax asset to be utilized.The Group also reviews unrecognized deferred income tax assets at each
statement of financial position date and recognizes them to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity
and the same taxation authority.
4.21. Revenue and expense recognition
Revenue and expenses are recognized net of the related taxes, except in the case of non-deductible expenses.
In accordance with the accrual principle, income and expenses are recognized when the goods or services represented
by them take place, regardless of when actual payment or collection occurs.
Revenue associated with the rendering of services is recognized by reference to the stage of completion of the services,
provided that the revenue can be measured reliably.
The Group’s main source of revenue is from advertising.This revenue is recognized in the period in which it is earned;
i.e. when the related advertisement is broadcast.
Expenses, including discounts and volume rebates, are recognized in the separate income statement in the period in
which they are incurred.
4.22. Equity-settled transactions
The Company maintains share option plans related to the compensation system for executive directors and board
members that are settled by delivering Company shares.The employee benefits expense is determined based on the
fair value of the share options to be awarded on the date the option is granted. This expense is recognized over the
stipulated three-year period during which the services are rendered.The fair value of share options established at the
date the award was granted is not modified.
The options’ fair value is measured based on an internal valuation using valuation option models – specifically, the
binomial method – and taking into account the price of the option in the year, the life of the option, the price of the
underlying shares, the expected volatility of the share price, estimated dividend payments and the risk-free interest rate
for the life of the option.The option valuation models and the assumptions used are described in Note 21.