Cemex 2012 Annual Report Download - page 57

Notes to the
consolidated
financial
statements
57
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• In June 2011, the IASB amended IAS 19, which provides the accounting and disclosure requirements by employers for
employee benefits. The amendments to IAS 19 intend to provide investors and other users of financial statements with a
better understanding of an entity’s obligations resulting from the provision of defined benefit plans and how those obligations
will affect its financial position, financial performance and cash flows. Among other things, the amendments require: a) the
use of a single rate for the determination of the expected return on plan assets’ and the discount of the benefits’ obligation
to present value (together the “net interest expense”); b) the recognition of the net interest on the net defined benefit liability
(liability minus plan assets), instead of an interest cost on the liability and a separate return on plan assets; and c) the
recognition of all actuarial gains and losses for the period as part of other comprehensive income or loss, thereby, eliminating
the option to defer the recognition of gains and losses, known as the “corridor method”. The amendments to IAS 19 are
effective for CEMEX beginning January 1, 2013, with earlier application permitted. The use of the single rate will generally
increase the net interest expense for future periods. For the years ended December 31, 2012 and 2011, had CEMEX used a
single rate to determine the net interest expense on its net defined pension liability, the effect would have increased the net
interest expense on net defined pension liability of approximately $173 and $246, respectively (note 18).
• In October 2011, the IASB issued International Financial Reporting Interpretations Committee 20, Stripping costs in the
production phase of a surface mine (“IFRIC 20”), which is effective beginning January 1, 2013, with early adoption permitted.
IFRIC 20 addresses inconsistencies in the reporting of waste removal costs that are incurred in surface mining activity during
the production phase of the mine (“production stripping costs”). To the extent that the benefit from the stripping activity
is realized in the form of inventory produced, the entity shall account for the costs of that stripping activity in accordance
with the principles of IAS 2, Inventories. To the extent the benefit is improved access to ore, the entity shall recognize these
costs as an addition to, or as an enhancement of, the existing non-current asset. The capitalized amounts should be further
amortized over the expected useful life of exposed ore body based on the units of production method. As mentioned in
CEMEX’s accounting policy in note 2I, as of December 31, 2012, ongoing stripping costs in the same quarry are expensed
as incurred. Therefore, pursuant to IFRIC 20, beginning January 1, 2013, all stripping costs that result in improved access to
quarry reserves will be recognized as capital expenditures, as part of the carrying amount of the related quarries, reducing
cash production costs and increasing depletion expense. CEMEX estimates that the adoption of IFRIC 20 beginning in
January 1, 2013 would increase its annual capital expenditures and quarry depletion expense by approximately US$25
($321).
• In December 2011, the IASB amended IAS 32 for disclosure requirements for the offsetting of assets and liabilities on
the statement of financial position. The amended standard requires entities to disclose both gross information and net
information about both instruments and transactions eligible for offset in the statement of financial position and instruments
and transactions subject to an agreement similar to a master netting arrangement. The scope includes derivatives, sale
and repurchase agreements and reverse sale and repurchase agreements and securities borrowing and securities lending
agreements. The amendments to IAS 32 are effective beginning January 1, 2014 and require retrospective application.
CEMEX is currently evaluating the impact of adopting this amended standard; nonetheless, CEMEX does not expect that the
adoption of this amended standard will have a significant impact on its consolidated financial statements.
3) Revenues and construction contracts
For the years ended December 31, 2012, 2011 and 2010, net sales, after sales and eliminations between related parties resulting
from consolidation, were as follows:
2012 2011 2010
From the sale of goods associated to CEMEX’s main activities 1 $ 189,219 182,835 171,116
From the sale of services 2 2,574 2,531 2,182
From the sale of other goods and services 3 5,243 4,521 4,343
$ 197,036 189,887 177,641
1 Includes revenues generated under construction contracts as presented in the table below.
2 Refers mainly to revenues generated by Neoris N.V., a subsidiary involved in the sale of information technology solutions.
3 Refers mainly to revenues generated by minor subsidiaries operating in different lines of business.