153
ANNUAL REPORT AND CONSOLIDATED ACCOUNTS 2013
minus any impairment loss of that financial asset pre-
viously recognised in results – is removed from equity
and recognised in the consolidated statement of com-
prehensive income. Impairment losses from capital in-
struments recognised in results are not reversible.
The group complies with the guidelines of IAS 39 (re-
viewed in 2004) to determine the permanent impair-
ment of investments. This measure requires that the
group valuate, among other factors, the duration and
the extent to which the fair value of an investment is
less than its cost, the financial health and business out-
look for the subsidiary, including factors such as the in-
dustry’s and sector’s performance, technological altera-
tions and flows of operating cash and financing.
2.9 STOCKS
Stocks are presented at the lowest value between their
cost and the net realisation value. The cost is calculated
using the weighted mean cost.
The net realisation value corresponds to the estimated
sale price during normal business operations, minus
variable sale costs.
2.10 ACCOUNTS RECEIVABLE FROM CLIENTS
AND OTHER DEBTORS
Accounts receivable from clients and other debtors are
initially recognised at the fair value. Medium and long
term debts are subsequently measured at the amor-
tised cost, using the effective rate method minus the
impairment adjustment. The impairment adjustment of
accounts receivable is determined when there is objec-
tive evidence that the group will not receive all the owed
amounts according to the original conditions of the ac-
counts receivable. The impairment adjustment value
is the difference between the presented value and the
current estimated value of future cash flows, discount-
ed at the effective interest rate. The impairment adjust-
ment value is recognised in the consolidated statement
of comprehensive income.
2.11 CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash amounts, bank
deposits, other short term investments with high liquid-
ity and initial maturities of up to 3 months and bank
overdrafts. Bank overdrafts are presented in the con-
solidated statement of financial position, in current lia-
bilities, in the Obtained Loans item.
2.12 SHARE CAPITAL
Ordinary shares are classified in equity.
Incremental costs directly attributable to the emission
of new shares or options are presented in equity as a
deduction, net of taxes, of entries.
When any group company acquires shares in the parent
company (own shares), the amount paid, including costs
directly attributable (net of taxes), is deducted from the
equity attributable to the shareholders of the parent
company until the shares are cancelled, re-issued or
sold. When those shares are subsequently sold or re-is-
sued and after deducting directly imputable transaction
costs and taxes, any receipt is included in the equity of
the company’s shareholders.
