AMPER, SA and Subsidiaries Consolidated Financial Statements for ...

Likewise, the Group needs to effectively eliminate the exposure inherent in the hedged item or
position throughout the forecast term of the hedge. There needs to be documentary evidence that
the designation of the derivative specifically took place to hedge certain balances or transaction,
and the manner in which this effective hedge would be achieved and measured.
Derivatives are initially recorded at acquisition cost in the Consolidated Balance Sheet and the
required value adjustments are subsequently made to reflect their fair value at all times, being
recorded under "Non-Current Financial Assets" in the consolidated balance sheet if they are
positive, and under "Bank Borrowings and Other Financial Liabilities" in the Consolidated Balance
Sheet if they are negative. Gains or losses from these fluctuations are recognised in the
consolidated income statement unless the derivative has been designated as a hedging
instrument that is highly effective, in which case -depending on the hedging- they are assigned to
equity, net of the tax effect, until they are realised or in the consolidated income statement,
offsetting change in value of the hedged item.
A hedge is considered highly effective when the changes in the fair value or in the cash flows of
the underlying operation directly attributable to the hedged risk are offset by the changes in the
fair value or cash flows of the hedging instrument, with an effectiveness of between 80%-125%.
The inefficient portion of the hedge is directly recognised in the consolidated income statement.
The fair value of the derivative financial instruments is calculated as follows:
• Derivatives quoted in an organised market: at market price at the end of the financial
year.
• In the case of derivatives not traded in organised markets, the Group uses for the
assessment the expected cash flows discounts based on spot and futures market
conditions at the end of each financial year.
• The Group discontinues hedge accounting prospectively if the hedging instrument
expires, is sold or the hedge no longer complies with the conditions which qualified it for
hedge accounting or the Group revokes the designation. In these cases, the amount
accumulated in other comprehensive income is not recognized in the income statement
until the expected transaction takes place. Notwithstanding the above, the amount
accumulated in other comprehensive income is reclassified to financial income or
expense as soon as the Group no longer expects the intended transaction to occur.
f) Trade and other receivables
Receivables are initially recognised in the consolidated balance sheet at their market value, and
are subsequently valued at amortised cost using the effective interest rate.
The Group recognises provisions based on the difference between the recoverable amount of the
receivables and the book value at which they are recorded. The recoverable amount of debt is
calculated by discounting estimated future cash flows, using the effective interest rate at the
transaction date.
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