MEDIASET 2015. FINANCIAL STATEMENTS AND MANAGEMENT REPORT

FINANCIAL STATEMENTS AND MANAGEMENT REPORT 2015

Impairment of non-current non-financial assets

The Company assesses at least at each year end whether there is an indication that a non-current asset or, where

applicable, a cash-generating unit may be impaired. If any such indication exists, and in all events when goodwill or

intangible assets have indefinite useful lives, the Company estimates the asset’s recoverable amount.

The recoverable amount is the higher of the fair value less cost to sell and the value in use.When the carrying amount

of an asset or CGU exceeds its recoverable amount, the asset is considered

assess value in use, expected

future cash flows are discounted to their present value using risk-free market rates, adjusted by the risks specific to the

asset. For those assets that do not generate cash inflows largely independent of those from other assets or groups of

assets, the recoverable amount is determined for the CGU to which the asset belongs.

Impairment loss and its reversion are recognized in the income statement. Impairment loss is reversed only if the

circumstances giving rise to it have ceased to exist, except those related to goodwill. The reversal is limited to the

carrying amount that would have been determined had no impairment loss been recognized for the asset.

Goodwill and intangibles with indefinite lives are tested for impairment by determining the recoverable amount of the

cash-generating unit to which they relate. If the recoverable amount of the cash-generating unit is less than the carrying

amount, an impairment loss is recognized.

Financial instruments

Financial assets

A) Recognition and measurement

Financial instruments are classified into one of the following categories for measurement purposes:

1. Loans and receivables

2. Held-to-maturity investments

3. Financial assets held for trading

4. Other financial assets at fair value through profit and loss

5. Investments in group companies, joint ventures and associates

6. Available-for-sale financial assets

Financial assets are initially recognized at fair value. Unless there is evidence to the contrary, fair value is the transaction

price.The transaction price is equivalent to the fair value of the consideration paid plus directly attributable transaction

costs, except, for financial assets held for trading and other financial assets at fair value through profit or loss, directly

attributable transaction costs are recognized directly in the income statement of the year in which the financial asset is

acquired. In addition, for financial assets held for trading and available-for-sale financial assets, preferential subscription

and any similar rights acquired will be part of the initial measurement.

a.1) Loans and receivables

Loans and receivables comprise financial assets arising from the sale of goods or the rendering of services in the

ordinary course of the Company’s business.The category also includes credits from non-commercial operations, which

are defined as financial assets that, in addition to not being equity instruments or derivatives, have no commercial