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FINANCIAL STATEMENTS AND MANAGEMENT REPORT 2015
B) Derecognition of financial liabilities
The Company derecognizes a financial liability when the obligation under the liability is extinguished.And it also proceeds
to derecognize its own financial liabilities that it acquires, even with a view to reselling them in the future.
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, 2015 and 2014 were classified as held for trading, with gains or
losses recognized in profit or loss.
Non-current assets held for sale
The Company classifies as “Non-current assets held for sale” assets whose carrying amount is expected to be realized
through a sale transaction, rather than through continuing use, when the following criteria are met:
• When they are immediately available for sale in their present condition, subject to the normal terms of sale; and
• Their sale is highly likely.
Non-current assets held for sale are accounted for at the lower of their carrying amount and fair value less cost to
sell, except deferred tax assets, assets arising from employee benefits, and financial assets which do not correspond to
investments in Group companies, joint ventures and associates, which are measured according to specific standards.
These assets are not depreciated and, where necessary, the corresponding impairment loss is recognized to ensure that
the carrying amount does not exceed fair value less cost to sell.