IBERSOL | Integrated Management Report 2022

Consolidated Financial Statements 8.2. Bank Debt Accounting policies Borrowings are recorded under liabilities at the nominal value received, net of issue costs, which corresponds to their respective fair value on that date. Subsequently, they are measured using the amortized cost method, with the corresponding financial charges calculated in accordance with the effective interest rate. The effective interest rate is the rate that discounts future payments over the expect- ed life of the financial instrument to the net carrying amount of the financial liability. As at 31 December 2022 and 2021 current and non-current borrowings had the fol- lowing detail: Dec/2022 Dec/2021 Non-current Bank loans 29 834 860 75 839 066 Commercial paper 16 400 000 64 600 000 46 234 860 140 439 066 Current Bank overdrafts - - Bank loans 12 274 609 13 325 470 Commercial paper 11 572 417 13 267 814 23 847 026 26 593 284 Total borrowings 70 081 886 167 032 350 Average cost 2,6% 1,9% The maturity of non-current bank borrowings and commercial paper is as follows: Dec/2022 Dec/2021 between 1 and 2 years 20 877 703 37 055 776 between 2 and 5 years 24 578 196 100 609 070 > 5 years 778 960 2 774 219 Total non current borrowings 46 234 860 140 439 066 For Commercial Paper Programs, when there is a termination date, we consider matu- rity on that date, regardless of the terms for which they are contracted. There are commercial paper financing agreements that include cross default clauses. Such clauses refer to contractual non-compliance in other contracts or tax non-com- pliance, in which case it does not occur. 452