Consolidated Annual Accounts 2017

Atresmedia Corporación de Medios de Comunicación, S.A. and Subsidiaries Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 2 and 29). In the event of discrepancy, the Spanish-language version prevails. 2017 CONSOLIDATED FINANCIAL STATEMENTS 23 c) Available-for-sale financial assets: debt securities and equity instruments of other companies not classified in any of the above categories. Initial measurement Financial assets are initially measured at the fair value of the consideration given plus directly attributable transaction costs. Subsequent measurement Loans and receivables, and held-to-maturity investments are subsequently measured at amortised cost. Held-for-trading financial assets are measured at fair value, based on expected results, the estimated dividend payable, the share price and share price volatility, and the risk- free rate at year-end. Any changes in fair value are recognised in profit or loss. Available-for-sale financial assets, corresponding to investments in equity instruments, whose fair value cannot be estimated reliably, are measured at cost less any accumulated impairment losses. At least at each reporting date the Group tests financial assets not measured at fair value through profit or loss (receivables) for impairment. Objective evidence of impairment is considered to exist if the recoverable amount of the financial asset is less than its carrying amount. When this occurs, the impairment loss is recognised in the consolidated statement of profit or loss. The Group uses the strategic plans of the various businesses to calculate any possible impairment losses and discounts expected future cash flows. The Group prepares the various projections individually, taking into account the expected future cash flows of each CGU. In calculating any valuation adjustments required for trade and other receivables, the Group takes into account the date on which the receivables are due to be settled and the debtors’ equity position. The Group derecognises a financial asset when the rights to the cash flows from the financial asset expire or have been transferred and substantially all the risks and rewards of ownership of the financial asset have also been transferred, such as in the case of firm asset sales. However, it does not derecognise financial assets, and recognises a financial liability for an amount equal to the consideration received in transfers of financial assets in which substantially all the risks and rewards of ownership are retained, such as in the case of invoice discounting.