Cemex 2013 Annual Report Download - page 140
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Please find page 140 of the 2013 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to the financial statements
2L) Financial liabilities, derivative nancial instruments and fair value measurements (note 10)
Debt
Bankloansandnotespayablearerecognizedattheiramortizedcost.Interestaccruedonnancialinstrumentsisrecognizedinthebalance
sheet within “Other accounts payable and accrued expenses” against nancial expense. During the reported periods, CEMEX, S.A.B. de
C.V.didnothavenancialliabilitiesvoluntarilyrecognizedatfairvalueorassociatedtofairvaluehedgestrategieswithderivativenancial
instruments.Directcostsincurredindebtissuancesor borrowings, aswellas debtrenancing ornon-substantialmodications todebt
agreementsthatdidnotrepresentanextinguishmentofdebt,arecapitalizedaspartoftherelateddebt’scarryingamountandamortizedas
interestexpenseaspartoftheeffectiveinterestrateofeachtransactionoveritsmaturity.Thesecostsincludecommissionsandprofessional
fees.
Financial instruments with components of both liability and equity
BasedonIAS32,
Financialinstruments:presentation
(“IAS32”)andIAS39,whenanancialinstrumentcontainscomponentsofbothliability
andequity,suchasanotethatatmaturityisconvertibleintoaxednumberofCEMEX,S.A.B.deC.V.’ssharesandthecurrencyinwhich
theinstrumentisdenominatedisthesameasthefunctionalcurrencyoftheissuer,eachcomponentisrecognizedseparatelyinthebalance
sheetaccordingtothespeciccharacteristicsofeachtransaction.Inthecaseofinstrumentsmandatorilyconvertibleintosharesofthe
issuer,theliabilitycomponentrepresentsthenetpresentvalueofinterestpaymentsontheprincipalamountusingamarketinterestrate,
withoutassuminganyearlyconversion,andisrecognizedwithin“Othernancialobligations,”whereastheequitycomponentrepresentsthe
differencebetweentheprincipalamountandtheliabilitycomponent,andisrecognizedwithin“Otherequityreserves”netofcommissions.
Inthecaseofinstrumentsthatareoptionallyconvertibleintoaxednumberofshares,theliabilitycomponentrepresentsthedifference
betweentheprincipalamountandthefairvalueoftheconversionoptionpremium,whichreectstheequitycomponent(note2O).When
thetransactionisdenominatedinacurrencydifferentthanthefunctionalcurrencyoftheissuer,theconversionoptionisaccountedforasa
derivativenancialinstrumentatfairvaluethroughthestatementsofoperations.
Derivative nancial instruments
CEMEX,S.A.B.deC.V.recognizesallderivativeinstrumentsasassetsorliabilitiesinthebalancesheetattheirestimatedfairvalues,andthe
changesinsuchfairvaluesarerecognizedinthestatementsofoperationswithin“Othernancialexpense,net”fortheperiodinwhichthey
occur,exceptforchangesinfairvalueofderivativeinstrumentsassociatedwithcashowhedges,inwhichcase,suchchangesinfairvalueare
recognizedinstockholders’equity,andarereclassiedtoearningsastheinterestexpenseoftherelateddebtisaccrued,inthecaseofinterest
rateswaps.Likewise,inhedgesofthenetinvestmentinforeignsubsidiaries,changesinfairvaluearerecognizedinstockholders’equityas
partoftheforeigncurrencytranslationresult,whichreversaltoearningswouldtakeplaceupondisposaloftheforeigninvestment.During
thereportedperiods,CEMEX,S.A.B.deC.V.hasnotdesignatedanyderivativeinstrumentsasfairvaluehedges.Derivativeinstrumentsare
negotiatedwithinstitutionwithsignicantnancialcapacity;therefore,CEMEX,S.A.B.deC.V.believestheriskofnon-performanceofthe
obligationsagreedtobysuchcounterpartiestobeminimal.
Accruedinterestgeneratedbyinterestrateswaps,whenapplicable,isrecognizedasnancialexpenseintherelevantperiod,adjustingthe
effectiveinterestrateoftherelateddebt.
CEMEX,S.A.B.deC.V.reviewsitsdifferentcontractstoidentifytheexistenceofembeddedderivatives.Identiedembeddedderivativesare
analyzedtodetermineiftheyneedtobeseparatedfromthehostcontract,andrecognizedinthebalancesheetasassetsorliabilities,applying
thesamevaluationrulesusedforotherderivativeinstruments.
Fair value measurements
CEMEX,S.A.B.deC.V.appliestheguidanceofIFRS13,
Fairvaluemeasurements
(“IFRS13”)foritsfairvaluemeasurementsofnancial
assetsandnancialliabilitiesrecognizedordisclosedatfairvalue.IFRS13doesnotrequirefairvaluemeasurementsinadditiontothose
alreadyrequiredorpermittedbyotherIFRSsandisnotintendedtoestablishvaluationstandardsoraffectvaluationpracticesoutsidenancial
reporting.UnderIFRS13,fairvaluerepresentsan“ExitValue,”whichisthepricethatwouldbereceivedtosellanassetorpaidtotransfer
aliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate,consideringthecounterparty’screditriskinthe
valuation.
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