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Deferred tax liabilities are recognised for all taxable temporary differences, except for those
arising from the initial recognition of goodwill or of other assets and liabilities in a transaction
that is not a business combination and affects neither accounting profit (loss) nor taxable
profit (tax loss).
Deferred tax assets are recognised to the extent that it is considered probable that the
Company will have taxable profits in the future against which the deferred tax assets can be
utilised.
Deferred tax assets and liabilities arising from transactions charged or credited directly to
equity are also recognised in equity.
The deferred tax assets recognised are reassessed at the end of each reporting period and the
appropriate adjustments are made to the extent that there are doubts as to their future
recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each
reporting period and are recognised to the extent that it has become probable that they will be
recovered through future taxable profits.
In 2001 the Company began to be taxed on a consolidated basis with other Group companies
(see Note 16). In this connection, in calculating its income tax, the Company took into
consideration the corresponding Spanish Accounting and Audit Institute (ICAC) resolutions,
establishing the methods for the recognition of income tax at companies that file consolidated
tax returns.
4.8 Revenue and expense recognition
Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the
related goods and services occurs, regardless of when the resulting monetary or financial flow
arises. Revenue is measured at the fair value of the consideration received, net of discounts
and taxes.
Revenue from sales is recognised when the significant risks and rewards of ownership of the
goods sold have been transferred to the buyer, and the Company retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold.
Revenue from the rendering of services is recognised by reference to the stage of completion
of the transaction at the end of the reporting period, provided the outcome of the transaction
can be estimated reliably.
At present, the Company basically obtains revenue from the sale of advertising space; this
revenue is recognised in the income statement when the related advertising spot is broadcast.
Interest income from financial assets is recognised using the effective interest method and
dividend income is recognised when the shareholder's right to receive payment has been
established. Interest and dividends from financial assets accrued after the date of acquisition
are recognised as income.