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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 hedge was within a range of 80-125% of the gain or
loss on the hedged item.
In 2014 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