Annual Report 2010 - AdP

This category includes derivatives that do not qualify for the purpose of calculating hedging.
Changes in fair value are directly recorded under results for the period. These assets are classified as current assets if they are held
for sale or if they are expected to be realized within a period of 12 months after the balance sheet date.
2.10.5 Financial assets available for sale
Assets available for sale are non-derivative assets that: (i) the company intends to maintain for an indeterminate amount of time; (ii)
are identified as available for sale when they are initially recognized; or (iii) do not fit into the aforementioned categories. They are
stated as non-current assets, unless there is an intention to sell them during the 12 twelve months that follow the balance sheet date.
After initial recognition, the assets available for sale are recorded at fair value on the basis of their market value at the balance sheet
date, without any deduction related to transaction costs that may occur up until their sale. The respective changes in fair value are
recognized directly as shareholder capital under "Fair value reserve" until the assets are written off or an impairment loss is identified,
when the accumulated amount of potential gains and losses recorded under reserves is transferred to results. In the case of capital
instruments, a significant or prolonged decrease in fair value below cost is crucial to determine the existence of impairment.
Capital instruments that are not holdings in affiliate companies, joint undertakings or associated companies are classified as financial
assets available for sale, in accordance with IAS 39. If there is no market value these assets are maintained at acquisition cost, subject
to impairment tests.
2.10.6 Financial liabilities
Financial liabilities are classified according to the terms of their contract, regardless of the legal form they take on. IAS 39 - Financial
instruments: recognition and valuation provides for classification of financial liabilities into two categories: (i) financial liabilities at fair
value under results; (ii) other financial liabilities. Other financial liabilities include loans obtained, suppliers and other accounts payable.
2.10.7 Financial liabilities valued at fair value under results
Financial liabilities at fair value under results include non-derivative liabilities with the aim of selling in the short term and derivative
financial instruments that do not qualify for hedging purposes and classified as such during their initial recognition. Gains and losses
resulting from a change in the fair value of liabilities valued at fair value under results are recognized under results for the period.
2.10.8 Bank loans
Loans are initially recognized at fair value less transaction costs and then valued at amortized cost. Any difference between the issue
value (net of transaction costs) and the nominal value is recognized under results during the period in which the loans exist, in
accordance with the effective interest method. Loans obtained are classified under current liabilities, except if AdP Group possesses
an unconditional right to defer payment of liabilities by at least 12 months after the balance sheet date, and in such cases it is classified
under non-current liabilities.
2.10.9 Suppliers and other accounts payable
Balances of suppliers and other accounts payable are initially recorded at their nominal value, which is understood to be their fair
value, and subsequently recorded at amortized cost, in accordance with the effective interest rate. Financial liabilities are written off
when the underlying obligations are extinguished following payment, are cancelled or expire.
2.10.10 Total equity instruments
Total equity instruments are classified according to the terms of their contract, regardless of the legal form they take on. Total equity
instruments issued by group companies are recorded at received value, net of costs paid on their issue.
2.11 Derivatives and hedging
The group uses derivatives with the sole purpose of managing the financial risks it is exposed to. In accordance with its financial
policies, the group does not use derivatives for speculation purposes. Even though the derivatives used by the group are effective
instruments for hedging risks, not all of them qualify as hedging instruments under the rules and requirements of IAS 39. Instruments
that do not qualify as hedging instruments are recorded in the balance sheet at fair value, and its changes are recorded under results.
Whenever available, the fair value of derivatives is estimated on the basis of quoted instruments. In the absence of market prices,
the fair value of derivatives is estimated using the discounted cash flow method and options valuation models, in accordance with
generally accepted market principles. Derivatives are recognized on their trade date at fair value. Subsequently, the fair value of
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