AMPER, SA and Subsidiaries Consolidated Financial Statements for ...

e) Financial instruments
Financial investments
The Group classifies its non-current and current financial investments, excluding those valued by
the equity method and those held for sale, in four categories:
- Loans and receivables (other non-current assets): these are recorded at amortised cost,
(basically the cash delivered) less principal repayments, plus the accrued interest
receivable, in the case of loans, and at the current value of the consideration paid, in the
case of receivables.
The Group records provisions at the difference between the recoverable amount of the
receivables and the book value at which they are recorded.
- Held-to-maturity investments: those for which the Group has the intention and capacity to hold
until their date of maturity. They are also accounted for at amortised cost. At 31 December
2010 and 2011 the Group had no financial instrument that could be classified in this category.
- Financial assets recorded at fair value through profit and loss: these include the business
portfolio and financial assets that are managed and valued according to the fair value criterion.
At 31 December 2010 and 2011 the Group had no financial instrument that could be classified
in this category.
The company derecognises financial assets when they expire or when it has transferred the
rights on the cash flows of the particular financial asset, and the risks and benefits inherent to
owning them have been substantially transferred, e.g. assignments of commercial loans in
factoring operations in which the company has no credit or interest risk. In contrast, the Company
does not derecognise financial assets, and acknowledges a financial liability for a sum equal to
the consideration received, in assignments of financial assets in which the risks and benefits
inherent to owning them are substantially retained, such as bill discounting or "recourse
factoring”.
Cash and other cash equivalents.
Cash on hand and at banks, demand deposits and other high-liquidity short-term investments that
can be converted into cash and have an insignificant risk of change in value are recorded under
this heading in the consolidated balance sheet.
Financial liabilities
Financial liabilities are generally recognised at the amount received, net of the transaction costs
incurred. In subsequent periods, these obligations are measured at amortised cost, using the
effective interest rate method. Financial expenses, including premiums payable in liquidations or
reimbursement and direct issue costs follow the criterion of accrual in the consolidated income
statement, using the effective interest rate method. These are added to the book value of the
liabilities in the proportion that they are not liquidated in the period in which they occur.
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