16
-
Non-inventoriable in-house productions (programmes produced to be shown only once) are
measured using the same methods and procedures as those used to measure inventoriable in-
house productions. Programmes produced and not shown are recognised at year-end under
“Programme Rights - In-House Productions and Productions in Process” in the balance sheet. The
cost of these programmes is recognised as an expense under “Programme Amortisation and
Other” in the income statement at the time of the first showing.
-
Rights on outside productions (films, series and other similar productions) aremeasured at
acquisition cost. These rights are deemed to have been acquired when the term of the right
commences for the Company. Payments made to outside production distributors prior to
commencement of the term of the right are recorded under “Advances to Suppliers” in the balance
sheet.
The amortisation of the rights is recognised under “Programme Amortisation and Other” in the
income statement on the basis of the number of showings, in accordance with the rates shown
below, which are established on the basis of the number of showings contracted:
FILMS
Number of showings contracted
1
2
3ormore
1st showing
100%
50%
50%
2nd showing
-
50%
30%
3rd showing
-
-
20%
SERIES
Number of showings contracted
1
2ormore
1st showing
100%
50%
2nd showing
-
50%
-
Live broadcasting rights aremeasured at cost. The cost of these rights is recognised as an
expense under “Programme Amortisation and Other” in the income statement at the time of
broadcast of the event onwhich the rights were acquired.
Raw and othermaterials
Dubbings, sound tracks, titles and signature tunes of outside productions are recorded at
acquisition or production cost. The amortisation of rights is recorded under “Programme
Amortisation and Other” in the income statement at the time of the showing, using the same
methods as those used for outside productions.
Other inventories are recorded at acquisition cost and are allocated to profit or loss by the
effective or actual amortisationmethod over the production period.
Write-downs
The Company recognises write-downs to reduce the unamortised value of in-house productions
and of the rights on outside productions which it considers will not be shown. When these rights
expire, the valuation adjustments are recognised in profit or loss when the cost of the rights is
derecognised.
Classification of programmes
In accordance with the Spanish National Chart of Accounts, programme inventories are classified
as current assets on the basis of the normal business cycle and standard practice in the industry in
which the Company operates. However, programmes are amortised over several years (see Note
13).
