IBERSOL Annual Report 2018

ANNUAL REPORT 2018 cash flows represent only the payment of principal and interest and therefore com- ply with the requirements for measurement at amortized cost provided for in IFRS 9. b) Assets measured at fair value through other comprehensive income A financial asset is measured at fair value through other comprehensive income if the objective inherent to the business model used is achieved either by collecting contractual cash flows or by selling financial assets and (if the underlying contrac- tual cash flows represent The assets classified in this category are initially and sub- sequently measured at their fair value, and the changes in their accounting value are recorded against other comprehensive income, except for the recognition of impair- ment losses, interest and when the financial asset is derecognized, the gain or loss accumulated in other comprehensive income is reclassified to the income statement. c) Assets measured at fair value through profit or loss Financial assets that do not meet the requirements for classification in the situations referred to above are classified and measured at fair value through profit or loss, residual category under IFRS 9. 2.9.2 Recognition and derecognition Acquisitions and disposals of financial assets are recognized on the date of their ne- gotiation, that is, on the date on which the Group undertakes to acquire or dispose of these financial assets. Financial assets are derecognised when the Group’s contractual rights to the receipt of its future cash flows expire when the Group has substantially transferred all the risks and rewards associated with its detention or when it retains, but not substan- tially, part of the risks and benefits associated with their detention, the Group has transferred control over the assets. 2.9.3 Impairment Until 31 December 2017, the Group carried out an assessment of the existence of objective evidence of impairment, as set forth in IAS 39, including any impairment resulting from an adverse impact on the estimated future cash flows of the financial asset or group of financial assets and where it can be measured reliably. After January 1, 2018, IFRS 9 establishes a new impairment model based on “ex- pected losses”, which replaces the previous model based on “losses incurred” in IAS 39. In this sense, the Group recognizes impairment losses before there is objective evidence of loss of value arising from a past event. This model is the basis for the recognition of impairment losses on financial instruments whose measurement is measured at amortized cost or at fair value through other comprehensive income. The impairment model depends on the occurrence or not of a significant increase in credit risk since the initial recognition. If the credit risk of a financial instrument has not increased significantly since its initial recognition, the Group recognizes an 223