building a STRONGER foundation - Cemex

V) CONCENTRATION OF CREDIT
CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements – (Continued)
As of December 31, 2010, 2009 and 2008
(Millions of Mexican pesos)
CEMEX sells its products primarily to distributors in the construction industry, with no specific geographic concentration within the countries
in which CEMEX operates. As of December 31, 2010, 2009 and 2008, no single customer individually accounted for a significant amount of
the reported amounts of sales or in the balances of trade receivables. In addition, there is no significant concentration of a specific supplier
relating to the purchase of raw materials.
W) NEWLY ISSUED FINANCIAL REPORTING STANDARDS EFFECTIVE IN 2011 AND 2012
In 2010 and 2009, the CINIF issued the following MFRS, effective beginning January 1, 2011 and 2012, as indicated below:
MFRS B-5, “Financial information by segments” (“MFRS B-5”)
New MFRS B-5 supersedes Bulletin B-5, “Financial information by segments.” The most significant changes, beginning on January 1, 2011,
are the following: (i) companies should disclose information by operating segment which is usually used by top management, in addition to
the current disclosure of information by products or services and geographical segments; (ii) the requirement that companies disclose
information by primary and secondary segments will be eliminated; (iii) a business in pre-operative stage may be considered as an operating
segment; (iv) disclosure by segments of financial income and expenses will be required, as well as other components of Comprehensive
Financial Result; and (v) disclosure of liabilities by operating segment will be required. CEMEX does not anticipate any material impact as a
result of the adoption of new MFRS B-5 in 2011.
MFRS B-9, “Interim Financial Reporting” (“MFRS B-9”)
New MFRS B-9 supersedes Bulletin B-9, “Interim Financial Reporting.” The most significant changes, beginning on January 1, 2011, are the
following: (i) MFRS B-9 requires the statement of changes in stockholders’ equity and the statement of cash flows in addition to the balance
sheet and the income statements; and (ii) requires for all financial statements that information presented for interim periods be compared to
the equivalent interim period for the immediate previous year, and in the case of the balance sheet also to be compared to the balance sheet as
of the end of the immediate prior year. CEMEX does not anticipate any material impact as a result of the adoption of new MFRS B-9 in 2011.
MFRS C-4, “Inventories” (“MFRS C-4”)
In November 2010, CINIF issued MFRS C-4. The main aspects of MFRS C-4, beginning on January 1, 2011, are as follows: (i) MFRS C-4
formally prohibits the use of the direct cost method for inventory valuation, which excludes fixed production costs; (ii) the inventory
allocation to the cost of sales at the moment of a sale transaction based on last inputs, first outputs, or LIFO, has been eliminated. CEMEX
does not use either of the two options eliminated; therefore, CEMEX does not anticipate any material impact as a result of the adoption of
new MFRS C-4 in 2011.
MFRS C-5, “Advanced Payments” (“MFRS C-5”)
In November 2010, CINIF also issued MFRS C-5. Beginning on January 1, 2011, MFRS C-5 requires that advanced payments for the
purchase of inventory or fixed assets be recognized within short-term or long-term assets, as appropriate, but outside the items of inventory
and/or fixed assets, as was the previous practice; and that advance payments should be subject to impairment losses when the carrying amount
exceeds the expected benefits. CEMEX does not anticipate any material impact as a result of the adoption of new MFRS C-5 in 2011.
MFRS C-6, “Properties, Plant and Equipment” (“MFRS C-6”)
In December 2010, CINIF issued MFRS C-6, which supersedes Bulletin C-6, “Real Estate, Machinery and Equipment.” The main changes
from MFRS C-6 beginning on January 1, 2011, are the following: (i) MFRS C-6 specifically covers plant and equipment associated with
biological assets and mining industries; (ii) establishes guidelines for the recognition at fair value of exchanges of non-monetary assets when
the transaction has commercial substance, with gains and losses upon initial recognition being recognized through the income statement for
the period; (iii) incorporates the basis to determine the residual value for components of fixed assets; (iv) defines that assets received for no
consideration have an acquisition cost equal to zero instead of being recognized at fair value in equity surplus; and (v) requires that idle
components should continue to be depreciated unless depreciation method is based on the component’s activity. In addition, beginning
January 1, 2012, MFRS C-6 establishes the requirement to depreciate the main components of fixed assets which have clearly different useful
lives based on such specific useful lives instead of as a single major asset. CEMEX does not anticipate any material impact to its financial
statements as a result of the adoption of new MFRS C-6 in 2011 and 2012.
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