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corresponding to the balance sheet date is used, in accordance with the contractual conditions. To calculate the impairment losses of a group of fnancial 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 fows, the market value of the instrument may be used, provided that it is sufciently 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 expenses, 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 diference 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 fows 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 fnancial 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.

Available-for-sale fnancial assets

When there is objective evidence of a decline in the fair value of this category of fnancial assets due to impairment, the underlying capital losses recognized as “Unrealized gains (losses) reserve” in equity are taken to the income statement.

The reversal of an impairment loss is recognized in the income statement. Such reversal is limited to the carrying amount of the fnancial asset that would have been recognized on the reversal date had no impairment loss been recognized.

D) Derecognition of fnancial assets

The Company derecognizes all or part of a fnancial asset when the contractual rights to related cash fows expire or are transferred. In such cases, substantially all of the risks and rewards of ownership must be assigned, under circumstances that are evaluated by comparing the Company’s exposure before and after the transfer with the variability in the amounts and the timing of the net cash fows of the transferred asset.

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GESTEVISION TELECINCO, S.A.