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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
When debt instruments are exchanged, provided that their contractual terms are substantially different, the original
financial liability is derecognized and the new financial liability is recognized. Financial liabilities whose contractual terms
are substantially modified are treated in the same way.
The difference between the carrying amount of the derecognized financial asset (or part of it) and the compensation
paid, including any attributable transaction costs, which also includes any new asset transferred other than cash or liability
assumed, is recognized in the income statement in the year to which it relates.
When debt instruments are exchanged whose contractual terms are not substantially different, the original financial
liability is not derecognized, and the commissions paid are recognized as an adjustment to the carrying amount. The
amortized cost of a financial liability is determined by applying the effective interest rate, which is the rate the makes
the carrying amount of the financial liability on the modification date equal to the cash flows to be paid as per the new
terms.
Financial derivatives and hedges
Cash flow hedges are hedges to exposure to variability in cash flows attributable to a specific risk associated with
a recognized asset or liability or to a highly probable forecast transaction that may affect the income statement. The
effective portion of the gain or loss on the hedge instrument is recognized directly in equity, whereas the ineffective
portion is recognized in the income statement.
The amounts recognized in equity are transferred to the income statement when the hedged transaction affects profit
or loss, as well as when financial expense or revenue is recognized, or when a forecast sale or purchase takes place.
When the hedged item is the cost of a financial liability or asset, the amounts recognized in equity are transferred to the
initial carrying amount of the non-financial liability or asset.
If the forecast transaction is no longer expected to take place, the amounts previously recognized in equity are transferred
to the income statement. If a hedge instrument expires, is sold, terminates or is exercised without being replaced or
renegotiated, or its designation as a hedge is revoked, the amounts previously recognized in equity continue to be
recognized under that heading until the transaction occurs. If the related transaction is not expected to take place, the
amount is recognized in the income statement.
The Company’s financial derivatives at December 31, 2012 and 2011 were classified as held for trading, with gains or
losses recognized in profit or loss.
Treasury shares
Treasury shares are recognized in equity as a decrease in “Capital and reserves” when acquired. No loss or gain is shown
in the income statement on sale or cancelation. Expenses incurred in connection with transactions with treasury shares
are recognized directly in equity as a decrease in reserves.
Inventories
In-house production programs are recognized as inventories.These programs are recognized at production cost, which
is determined by considering all costs attributable to the product which are incurred by the Company.
Advances paid for programs are also included.
They are expensed when the related programs are broadcast.
When the net realizable value of inventories is less than acquisition or production cost, the corresponding provision is
recognized in the income statement.
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