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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 amortisation method 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 12).
4.6 Foreign currency transactions
The Company's functional currency is the euro. Therefore, transactions in currencies other
than the euro are deemed to be “foreign currency transactions” and are recognised by
applying the exchange rates prevailing at the date of the transaction.
At the end of each reporting period, monetary assets and liabilities denominated in foreign
currencies are translated to euros at the rates then prevailing. Any resulting gains or losses
are recognised directly in the income statement in the year in which they arise.
Monetary assets and liabilities carried at fair value that are denominated in foreign currencies
are translated at the exchange rates prevailing at the date when the fair value was
determined. The resulting gains or losses are recognised in equity or in profit or loss by
applying the same methods as those used to recognise changes in fair value, as indicated in
Note 4.4 on financial instruments.
4.7 Income tax
Tax expense (tax income) comprises current tax expense (current tax income) and deferred
tax expense (deferred tax income).
The current income tax expense is the amount payable by the Company as a result of income
tax settlements for a given year. Tax credits and other tax benefits, excluding tax withholdings
and pre-payments, and tax loss carryforwards from prior years effectively offset in the current
year reduce the current income tax expense.
The deferred tax expense or income relates to the recognition and derecognition of deferred
tax assets and liabilities. These include temporary differences measured at the amount
expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities and their tax bases, and tax loss and tax credit carryforwards. These amounts
are measured at the tax rates that are expected to apply in the period when the asset is
realised or the liability is settled.