Cemex 2012 Annual Report Download - page 127

Notes to the
financial
statements
127
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The line item “Other expenses, net” in the statements of operations consists primarily of revenues and expenses not directly
related to CEMEX, S.A.B. de C.V.’s main activity, or which are of an unusual and/or non-recurring nature.
Statements of other comprehensive loss
For the years ended December 31, 2012, 2011 and 2010, the CEMEX, S.A.B. de C.V. adopted amendments to IAS 1, which,
among other things, require entities to present line items for amounts of other comprehensive income (loss) in the period grouped
into those that, in accordance with other IFRS: a) will not be reclassified subsequently to profit or loss; and b) will be reclassified
subsequently to profit or loss when specific conditions are met.
Statements of cash flows
The statements of cash flows present cash inflows and outflows in nominal pesos, excluding effects of inflation and unrealized
foreign exchange effects. The statements of cash flows exclude transactions that did not represent sources or uses of cash such
as:
• In 2012 and 2011, the increases in stockholders’ equity associated with dividends in shares through the capitalization of
retained earnings for $4,138 and $4,216, respectively (note 13A);
• In 2012 and 2011, the increases in stockholders’ equity associated with the CPOs issued as part of the executive stock-
based compensation for $486 and $506 (note 13A), respectively;
2B) Use of estimates and critical assumptions
The preparation of financial statements in accordance with IFRS principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements, as well as the reported amounts of revenues and expenses during the period. These assumptions
are reviewed on an ongoing basis using available information. Actual results could differ from these estimates.
The main captions subject to estimates and assumptions by management include, among others, impairment tests of long-lived
assets and the subsidiaries and associates investment, allowances for doubtful accounts, recognition of deferred income tax
assets, as well as the measurement of financial instruments. Significant judgment by management is required to appropriately
assess the amounts of these assets and liabilities.
2C) Foreign currency transactions
According to IAS 21, the eects of changes in foreign exchange rates (“IAS 21”), transactions denominated in foreign currencies are
recorded in the functional currency at the exchange rates prevailing on the dates of their execution. Monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet
date, and the resulting foreign exchange fluctuations are recognized in earnings.
The most significant closing exchange rates and the approximate average exchange rates for balance sheet accounts and income
statement accounts, respectively, of pesos per dollar as of December, 31 2012, 2011 and 2010, were as follows:
2012 2011 2010
Currency Closing Average Closing Average Closing Average
United States Dollar 12.8500 13.1500 13.9600 12.4800 12.3600 12.6700
The peso to U.S. dollar exchange rate used by CEMEX, S.A.B. de C.V. is an average of free market rates available to settle its foreign
currency transactions. No significant differences exist, in any case, between the foreign exchange rates used by CEMEX, S.A.B. de
C.V. and those exchange rates published by the Mexican Central Bank.
2D) Business concentration
CEMEX, S.A.B. de C.V. provides 100% of its services to the subsidiaries in the countries in which the company has operations.
According to its analysis, CEMEX, S.A.B. de C.V. considers there is no risk relative to the recovery of its accounts receivable.