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4.- Accountingpolicies
The principal accounting policies used by the Company in preparing its financial statements for
2013 and 2012, in accordancewith the SpanishNational Chart of Accounts, were as follows:
4.1 Intangible assets
As a general rule, intangible assets are recognised initially at acquisition or production cost. They
are subsequently measured at cost less any accumulated amortisation and any accumulated
impairment losses. These assets are amortised over their years of useful life.
Licences and trademarks
These accounts include the amounts relating to the licence and the trademark identified in the
purchase price allocation process arising from the merger with Gestora de Inversiones
Audiovisuales La Sexta, S.A.
The trademark is amortised on a straight-line basis over its useful life, which is estimated to be 20
years.
With regard to the licence, based on an analysis of all the relevant factors, the Company considers
that there is no foreseeable limit to the period over which it is expected to generate net cash
inflows for the Company. As a result, the licence was classified as an intangible asset with an
indefinite useful life and, therefore, it is not amortised. This indefinite useful life assessment is
reviewed at each reporting date and is consistent with the Company's related business plans.
The Company has reviewed the licence and trademark valuations identified in the purchase price
allocation process performed within the framework of the aforementionedmerger. For this review,
which included the participation of an independent expert, the standard procedures for analyses of
this kind were used, and it was concluded that the assigned values are within reasonable valuation
ranges. Consequently, it was not necessary to modify the initial estimates or make any
adjustments at 2013 year-end.
Since the asset has an indefinite useful life, a recoverability assessment was performed at year-
end. The key assumptions on which the cash flow projections are based relate mainly to
advertising markets, audience, advertising efficiency ratios and the evolution of expenses. Except
for advertising data, which is measured on the basis of external sources of information, the
assumptions are based on past experience and reasonable projections approved by Company
management and updated in accordancewith the performance of the advertisingmarkets.
Taking the correlation between the advertising market and the evolution of domestic demand and
private consumption as a reference, a retrospective analysis was conducted using the historical
data of these two variables, based onmarket consensus.
These future projections cover the next five years. The discount rate used to measure this
intangible asset was between 9% and 10%.
A variation of 0.5% in cumulative annual growth would give rise to a change in value of EUR 9
million, while a 0.5% increase in the discount rate would give rise to a change of EUR 13 million,
and a 0.5% decrease in the discount rate would result in a change of EUR 15 million. Zero
perpetual growth was used. An increase of 0.5%would give rise to an increase in value of EUR 16
million and a decrease of 0.5%would result in a decrease in value of EUR 14million.
