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4.4.4 Hedges
The Company uses derivative financial instruments to hedge the risks to which its business
activities, operations and future cash flows are exposed. Basically, these risks relate to changes in
exchange rates. The Company arranges hedging financial instruments in this connection.
In order for these financial instruments to qualify for hedge accounting, they are initially
designated as such and the hedging relationship is documented. Also, the Company verifies, both
at inception and periodically over the term of the hedge (at least at the end of each reporting
period), that the hedging relationship is effective, i.e. that it is prospectively foreseeable that the
changes in the fair value or cash flows of the hedged item (attributable to the hedged risk) will be
almost fully offset by those of the hedging instrument and that, retrospectively, the gain or loss on
the hedgewas within a range of 80-125% of the gain or loss on the hedged item.
In 2012 the Company used the following type of hedge, which is accounted for as described below:
Cash flow hedges: in hedges of this nature, the portion of the gain or loss on the hedging
instrument that has been determined to be an effective hedge is recognised temporarily in equity
and is recognised in the income statement in the same period during which the hedged item
affects profit or loss, unless the hedge relates to a forecast transaction that results in the
recognition of a non-financial asset or a non-financial liability, in which case the amounts
recognised in equity are included in the initial cost of the asset or liability when it is acquired or
assumed.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or
exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on
the hedging instrument recognised in equity is retained in equity until the forecast transaction
occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to net profit or loss for the year.
4.5 Inventories
Programme rights
Rights and programme inventories are valued, based on their nature, as follows:
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Inventoriable in-house productions (programmes produced to be re-run, such as series)
are measured at acquisition and/or production cost, which includes both external costs billed by
third parties for programme production and for the acquisition of resources and internal production
costs, which are calculated by applying pre-established internal rates on the basis of the time
during which operating resources are used in production. The costs incurred in producing the
programmes are recognised, based on their nature, under the appropriate headings in the income
statement and are included under “Programme Rights” in the balance sheet with a credit to
“Procurements – Inventories” in the income statement.
Amortisation of these programmes is recognised under “Programmes Amortisation and Other” in
the income statement, on the basis of the number of showings, in accordance with the rates
shown below:
Amortisation rate
1st showing
90%
2nd showing
10%
The maximum period for the amortisation of series is three years, after which the unamortised
amount is written off.
Given their special nature, the series which are broadcast daily are amortised in full when the first
showing of each episode is broadcast.
