Notes to the Financial Statements - Efacec

More documents

Recommendations

Info

2.2 Accounting for financial instruments – derivatives and hedging Derivatives are initially recognised at fair value and subsequently readjusted to their fair value. The method for recognising changes in fair value depend on whether the derivative is defi ned as a hedge instrument and if so, the nature of the asset/liability to be covered. The group arranges certain derivatives as: (1) fair value cover of recognised assets and liabilities or of commitments (fair value cover); (2) cover of highly probable forecast transactions (cash fl ow cover). For each transaction, the Group prepares documentation to justify the relationship between the hedge instruments and the related assets/liabilities covered, as well as the objective of risk management and the strategy for taking out cover. The Group also documents its evaluation, both at the start of the cover and on a continuous basis, as to whether the derivatives used for cover effectively compensate for fl uctuations in fair value or in the cash fl ows of the items covered. The fair value of derivatives used to take out cover is disclosed in Note 5, as well as the movements that took place in Shareholders’ Funds. a) Fair value hedging Changes in the fair value of derivatives that are arranged and qualifi ed for fair value hedging are recognised in the profi t and loss account, together with changes to the fair value of the assets and liabilities covered (in the covered position) attributable to the risk covered. b) Cash fl ow hedging The effective part of the change in fair value of derivatives that are arranged and qualifi ed for cash fl ow hedging is recognised in shareholders’ funds. The gain or loss related to the ineffective part is immediately recognised in the profi t and loss account. Concerning cover strategies that use options, in accordance with IAS 39 and complying with the effi ciency test, the strategy value is split into the intrinsic value and the temporary value. In accordance with the treatment referred above, the intrinsic value should be presented in shareholders’ funds (assuming the strategy is effi cient), while the temporal value should be booked to the profi t and loss account. The cumulative amounts in shareholders’ funds are reclassifi ed to profi t and loss in the same period in which the item covered generates gains and losses (for example, when the Sales forecast covered occurs). However, when the forecast covered transaction results in a non fi nancial asset (for example, stocks) or non fi nancial liability being recognised, the previously deferred gains and losses in shareholders’ funds are transferred and included in the initial measurement of that asset or liability. When a hedge instrument expires or is sold, or when a hedging does not comply with the accounting and qualifi cation criteria, any cumulative gain or loss existing at that moment in shareholders’ funds, remains in shareholders’ funds and is recognised when the forecast transaction is fi nally refl ected in the profi t and loss account. When the expected occurrence of a forecast transaction is no longer highly probable, the cumulative gains or losses refl ected in shareholders’ funds are immediately transferred to profi t and loss. c) Non qualifi ed derivatives for hedging purposes Certain derivatives do not comply with hedging accounting and qualifi cation criteria. Changes in fair value of these derivatives are immediately recognised in the profi t and loss account. 2.3 Estimates of fair value The fair value of fi nancial instruments available on the open market (for example publicly negotiated derivatives, negotiable instruments available for sale) is determined on the basis of quoted market prices on the balance sheet date. The quoted market price used for fi nancial assets of the Group is the price received by shareholders on the open market; the quoted market price for fi nancial liabilities is the price paid on the open market. The fair value of fi nancial instruments not traded on the open market (for example unquoted derivatives) is determined using valuation techniques. The Group uses a variety of methods and reaches its conclusions based on market conditions at each balance sheet date. Quoted market prices or negotiation quotas for similar instruments are used for long term debts. Other techniques, such as estimates of discounted cash fl ows, are used to determine the fair value of other fi nancial instruments. The fair value of interest rate swaps is calculated based on the present value of estimated future cash fl ows. The fair value of exchange rate futures contracts is determined using market exchange rates at the balance sheet date. The nominal value of debtor and creditor balances less estimated credit adjustments is assumed to be close to their fair value. The fair value of fi nancial liabilities is estimated by updating future contractual cash fl ows at the current market interest rate available for similar fi nancial instruments. 51 2007 Consolidated and Individual Financial Statments
C. Notes on the Balance Sheets as at 31 December 2007 and 2006 3. Tangible fixed assets 3.1 Movements that took place in the period As at 31 December 2006 Land and Buildings Plant and Equipment 52 Office Equipment Other Total Opening balance 22.117.305 11.356 52.928 26.558 22.208.147 Additions 119.019 0 13.005 1.605 133.629 Transfers 26.558 0 0 -26.558 0 Disposals 0 -1.887 0 0 -1.887 Depreciation for the period -875.831 -7.938 -23.001 0 -906.770 Closing balance 21.387.051 1.531 42.932 1.605 21.433.119 Acquisition or revalued cost 56.573.017 258.390 938.221 38.128 57.807.756 Cumulative depreciation -35.185.966 -256.859 -895.289 -36.523 -36.374.637 Net value 21.387.051 1.531 42.932 1.605 21.433.119 As at 31 December 2007 Opening balance 21.387.051 1.531 42.932 1.605 21.433.119 Additions 0 0 4.371 1.920.742 1.925.113 Transfers 0 0 1.605 -1.605 0 Disposals 0 0 0 0 0 Depreciation for the period -844.077 -1.330 -22.214 0 -867.621 Closing balance 20.542.974 767 201 26.694 1.920.742 22.490.611 Acquisition or revalued cost 56.573.017 258.390 938.221 38.128 57.807.756 Cumulative depreciation -36.030.043 -258.189 -911.527 1.882.614 -35.317.145 Net value 20.542.974 201 26.694 1.920.742 22.490.611 3.2 Revaluations Buildings and other tangible fi xed assets of the Group were re-valued on 1 January 2004, using the monetary revaluation coeffi - cients as part of the transition to IFRS (IFRS 1). Land is valued at fair value, a new adjustment having been made during 2005 that resulted in shareholders’ funds and land asset values increasing by 3,056,590 Euro. If tangible assets were shown at historical cost, the values in the balance sheet would be lower by 15,286,513 Euro (16,011,185 Euro in 2006). 3.3 Guarantees No pledges or guarantees exist on any assets.
Page 2 and 3: 1 2 Index Consolidated Financial St
Page 4 and 5: EFACEC Capital, SGPS, S.A. and Affi
Page 6 and 7: Attributable to shareholders Reserv
Page 8 and 9: A. General Information Notes to the
Page 10 and 11: 1.3 Reporting by segments A busines
Page 12 and 13: 1.7 Asset impairment Assets that do
Page 14 and 15: a) Sales The income recognised, in
Page 16 and 17: 2.3 Estimates of fair value The fai
Page 18 and 19: 3.2 Information by geographical seg
Page 20 and 21: 5.2 Goodwill The breakdown of goodw
Page 22 and 23: 8. Derivatives In relation to fi na
Page 24 and 25: 11. Stocks 31.12.2007 31.12.2006 Ra
Page 26 and 27: Commercial Paper On 8 July 2005, a
Page 28 and 29: Denomination of Loans The accountin
Page 30 and 31: 17. Provisions for risks and charge
Page 32 and 33: 21. Net financial charges 22. Incom
Page 34 and 35: 27.1 Transactions that took place i
Page 36 and 37: 27.4 Commitments and contingencies
Page 38 and 39: Foreign companies Company Name Head
Page 40 and 41: 41 2007 Consolidated and Individual
Page 42 and 43: EFACEC Capital, SGPS, S.A. Profit a
Page 44 and 45: Reserves Financial Instruments Merg
Page 46 and 47: A. General Information Notes to the
Page 48 and 49: 1.5 Investments Investments in grou
Page 52 and 53: 4. Investments in group and associa
Page 54 and 55: 6. Customers and Accrued Income 200
Page 56 and 57: On 30 November 2006, a second Comme
Page 58 and 59: Deferred tax booked in shareholders
Page 60 and 61: 17. Profit per share Basic The basi
Page 62 and 63: 21.4 Loans to related parties 2007
Page 64 and 65: To the Shareholders, Report and Opi
Page 66: ��

Notes to the Financial Statements - Efacec

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?