Page 33 - MEDIASET ESPAÑA / 2013. Financial Statements, Management and Corporate Governance Report

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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
NOTES TOTHE FINANCIAL STATEMENTS FOR THEYEAR ENDED DECEMBER 31, 2013
(Thousands of euros)
adjustments recognized as a finance cost as they accrue. No discounts are made on provisions falling due within twelve
months that do not have a significant financial effect. Provisions are reviewed at each balance sheet date and adjusted
to reflect the current best estimate.
Compensation receivable from a third party when provisions are settled is recognized as an asset, albeit not deducted
from the amount of the provision, and provided that there is no doubt that this compensation will actually be received,
and that it does not exceed the amount of the liability recognized. When a contractual or legal relationship exists by
virtue of which the Company is required to externalize the risk, and thus it is not liable for the related obligation, the
amount of the reimbursement is deducted from the amount of the provision.
In addition, contingent liabilities are considered to be possible obligations that arise from past events whose materialization
depends on the occurrence of future events not wholly within the Company’s control, as well as present obligations
arising from past events regarding which it is not probable that an outflow of resources will be required to settle them or
which cannot be reliably measured. Contingent liabilities are not recognized in the financial statements but are disclosed
in the accompanying notes, unless the likelihood of an outflow of resources is considered remote.
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 granting of Company shares to the other executive directors and directors of group companies is recognized in the
financial statements by increasing the value of the investment of said subsidiaries
Transactions in foreign currency
The financial statements are presented in thousands of euros, which is the Company’s functional currency.
Monetary items
Transactions in foreign currency are initially recognized at the exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing at the
balance sheet date.All exchange gains or losses arising from translation as well as those arising when balance sheet items
are settled are recognized in the income statement.
Non-monetary items
Non-monetary items measured at historical cost are translated at the exchange rate prevailing on the date of the
transaction.