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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
For these purposes, financial assets are recognized separately on initial measurement, based on maturity, accrued explicit
interest receivable at that date and the proposed dividends at the time the assets are acquired. For these purposes,
explicit interest refers to the contract interest rate applied to the financial instrument.
In addition, when distributed dividends are derived unmistakably from profit generated prior to the date of acquisition
given that the amounts of distributed dividends exceeded the profit generated by the associate since acquisition, the
dividends are not recognized as income and decrease the cost of the investment.
C) Impairment of financial assets
At year end, the Company evaluates if its financial assets or group of financial assets are impaired.
Financial assets recognized at amor tized cost (receivables and investments held to
maturity)
Valuation adjustments are made, provided that there is objective evidence that the value of a financial asset, or group
of financial assets, recognized at amortized cost has suffered an impairment loss as a result of one or more events that
have occurred after their initial recognition causing a reduction or delay in estimated future cash flows.
The impairment loss on these financial assets is the difference between their carrying value and the present value of
the future cash flows expected to be generated, minus the effective interest rate calculated at the time of their initial
recognition. For financial assets with floating interest rates, the effective interest rate corresponding to the balance sheet
date is used, in accordance with the contractual conditions. To calculate the impairment losses of a group of financial
assets, models based on statistical methods or formulas are used. For investments held to maturity as a substitute for
the present value of future cash flows, the market value of the instrument may be used, provided that it is sufficiently
reliable to be considered representative of the value that the Company might recover.
Impairment losses, as well as the reversion thereof when the amount of the loss diminishes for reasons related to a
subsequent event, are recognized as revenue or expense, respectively, in the income statement. The reversal of an
impairment is limited to the carrying value of the credit that would have been recognized on the reversal dates had no
impairment loss been recognized.
Investments in Group companies, joint ventures and associates
When there is objective evidence that the carrying amount of an investment will not be recoverable, the required
valuation adjustments must be made.
The valuation adjustment is the difference between the carrying amount of the investment and the recoverable amount,
which is the greater of the investment’s fair value, less costs to sell and the present value of future cash flows derived
from the investment. Unless better evidence of the recoverable amount of the investments is available, impairment of
this type of asset has been estimated taking into account the equity of the subsidiary, adjusted by any unrealized capital
gain existing on the measurement date.
Unless financial support has been promised to the investee, no provisions are set aside in excess of the value of the
investment.
Impairment loss and its reversion are recognized as expenses or as revenue, respectively, in the income statement.
The reversal of an impairment is limited to the carrying value of the estimate that would have been recognized on the
reversal dates had no impairment loss been recognized.