ANNUAL REPORT 2016
d) Financial assets available for sale
Financial assets available for sale are non-derivative assets which are designated in this
category or are not classified in any of the other categories. They are included in non-current
assets, except when the Board of Directors wishes to sell the investment within 12 months as
of the consolidated statement of financial position date.
2.8.2 Recognition and measurement
Purchases and sales of financial investments are recognized at the date of the transaction -
the date on which the Group undertakes to buy or sell the asset.
Investments in “Loans granted and accounts receivable” are initially recognized at fair value,
plus transaction costs, and are subsequently measured at amortized cost using the effective
interest rate, less any impairment losses.
Investments in “Available-for-sale financial assets” are initially recognized at fair value, plus
transaction costs, and are subsequently measured at fair value, except when they are invest-
ments in equity instruments for which fair value can not be determined with reliability, and the
valuation is maintained at the initial cost less impairment losses. Changes in fair value of avai-
lable-for-sale financial assets are recognized in equity. When available-for-sale financial assets
are sold or are impaired, accumulated adjustments to fair value changes are included in the
consolidated statement of comprehensive income, such as gains or losses on financial assets.
Financial investments are derecognised when the rights to receive cash from them expire or have been
transferred and the Group has transferred substantially all the risks and benefits of its ownership.
2.8.3 Impairment
On each consolidated statement of financial position, the Group checks for objective evidence showing
whether any group of financial assets is subject to impairment. In the event of equity securities classi-
fied as available for sale, a significant or lasting decrease in the fair value falling below the cost value is
determinant for knowing if there is impairment. If there is evidence of impairment applicable to finan-
cial assets available for sale, the accumulated loss – calculated by the difference between the acquisition
cost and the current fair value, minus any impairment loss of that financial asset previously recognised
in results – is removed from equity and recognised in the consolidated statement of comprehensive
income. Impairment losses from capital instruments recognised in results are not reversible.
The Group complies with the guidelines of IAS 39 (reviewed in 2004) to determine the permanent
impairment 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 outlook for the subsidiary, including factors such as the industry’s
and sector’s performance, technological alterations and flows of operating cash and financing.
The impairment adjustment of accounts receivable is determined when there is objective
evidence that the Group will not receive all the owed amounts according to the original condi-
tions of the accounts receivable. The impairment adjustment value is the difference between
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