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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
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 which are broadcast daily 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.
Cash and cash equivalents
This heading includes cash, current accounts, short-term deposits and purchases of assets under resale agreements that
meet the following criteria:
• They are readily convertible to cash.
• They mature within less than three months from the acquisition date.
• The risk of change in value is insignificant.
• They are part of the Company’s standard cash management strategy.
In terms of the cash flow statement, occasional bank overdrafts used as part of the Company’s cash management
strategy are recognized as a decrease in cash and cash equivalents.
Provisions and contingencies
Provisions are recognized in the balance sheet when the Company has a present obligation (derived from a contract
or a legal provision or from an explicit or implicit obligation) as a result of past events, and a quantifiable outflow of
resources is likely to be required to settle the obligation.
Provisions are measured at the present value of the best estimate of the amount that an entity would have to pay to
settle the obligation at the balance sheet date or to transfer it to a third party at that time, with provision discount
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.