Annual Report and Consolidated Accounts 2015
3.2 ESTIMATED FAIR VALUE
The fair value of financial instruments commer-
cialised in active markets (such as publicly nego-
tiated derivatives, securities for negotiation and
available for sale) is determined based on the
listed market prices on the consolidated state-
ment of financial position date. The market price
used for the group’s financial assets is the price
received by the shareholders in the current mar-
ket. The market price for financial liabilities is the
price to be paid in the current market.
The nominal value of accounts receivable (minus
impairment adjustments) and accounts payable
is assumed to be as approximate to its fair value.
The fair value of financial liabilities is estimated
by updating future cash flows contracted at the
current market interest rate that is available for
similar financial instruments.
4. IMPORTANT ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgements are continuously
evaluated and are based on past experience
and on other factors, including expectations
regarding future events that are believed to be
reasonably probable within the respective cir-
cumstances.
The group makes estimates and outlines prem-
ises about the future. Generally, accounting
based on estimates rarely corresponds to the
real reported results. Estimates and premises
that present a significant risk of leading to a
material adjustment in the accounting value of
the assets and liabilities in the following year
are described below:
a) Estimated impairment of goodwill
The group performs annual tests to determine
whether the goodwill is subject to impairment,
according to the accounting policy indicated in
Note 2.5. Recoverable amounts from the units
generating cash flows are determined based on
the calculation of utilisation values. Those calcu-
lations require the use of estimates (Note 9).
If the real gross margin is less, or the discount
rate - after taxes - is greater than the estimates
by the managers, the impairment losses of the
goodwill may be greater than those recorded.
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