Cemex 2013 Annual Report Download - page 52

Notes to the consolidated financial statements
Thenancialstatementsofforeignsubsidiaries,asdeterminedusingtheirrespectivefunctionalcurrency,aretranslatedtopesosattheclosing
exchangerateforbalancesheetaccountsandattheclosingexchangeratesofeachmonthwithintheperiodforstatementsofoperations
accounts. The functional currency is that in which each consolidated entity primarily generates and expends cash. The corresponding
translationadjustmentisincludedwithin“Otherequityreserves”andispresentedinthestatementofothercomprehensiveincome(loss)for
theperiodaspartoftheforeigncurrencytranslationadjustment(note20B)untilthedisposalofthenetinvestmentintheforeignsubsidiary.
AspermittedbyIFRS1,initsopeningbalancesheetunderIFRSasofJanuary1,2010,CEMEXelectedtoresettozeroallcumulativeforeign
currencytranslationadjustmentsdeterminedunderMFRS.Consequently,upondisposaloftheforeignoperations,thoseeffectsdetermined
beforethemigrationtoIFRSwillnotbeconsideredinthedeterminationofdisposalgainsorlosses.ConsideringguidanceinIAS21and
changingcircumstancesonthenetmonetarypositioninforeigncurrenciesoftheParentCompany,resultingmainlyfrom:a)asignicant
decreaseintaxliabilitiesdenominatedinMexicanPesos;b)asignicantincreasein itsU.S.Dollar-denominateddebtandothernancial
obligations;andc)theincreaseinU.S.Dollar-denominatedintra-groupadministrativeexpensesassociatedwiththeexternalizationofmajor
backofceactivitieswithIBM(note23C);effectiveasofJanuary1,2013,CEMEX,S.A.B.deC.V.,onastand-alonebasis,prospectively
changedits functionalcurrency fromtheMexican Peso tothe U.S.Dollar.The aforementionedchange hasno effect onthe functional
currenciesofotherconsolidatedentities.Moreover,thereportingcurrencyfortheindividualandconsolidatednancialstatementsofthe
ParentCompanycontinuestobetheMexicanPeso.ThemaineffectsintheParentCompany’s-onlynancialstatementsbeginningonJanuary
1,2013,associatedwiththechangeinfunctionalcurrency,ascomparedtoprioryearsare:i)alltransactions,revenuesandexpensesinany
currencyarerecognizedinU.S.Dollarsattheexchangeratesprevailingattheirexecutiondates;ii)monetarybalancesofCEMEX,S.A.B.de
C.V.denominatedinU.S.Dollarswillnotgenerateforeigncurrencyuctuations,whilemonetarybalancesinMexicanPesosandothernon-U.S.
Dollar-denominatedbalanceswillnowgenerateforeigncurrencyuctuationsthroughthestatementofoperations;andiii)theconversion
optionembeddedintheParentCompany’smandatoryconvertiblenotesdenominatedinpesosarenowtreatedasastand-alonederivative
instrumentwith changesinfairvalue through thestatementof operations (notes 16B and16D), theoptions embedded inthe Parent
Company’soptionalconvertiblenotesdenominatedindollarsceasedtobetreatedasstand-alonederivatives,recognizingitsfairvalueasan
equitycomponent(notes16Band16D).BasedonIFRS,priorperiodnancialstatementswerenotrestated.
During the reported periods, there were no subsidiaries whose functional currency was the currency of a hyperinationary economy,
whichisgenerallyconsideredtoexistwhenthecumulativeinationrateoverthelastthreeyearsisapproaching,orexceeds,100%.Ina
hyperinationaryeconomy,theaccountsofthesubsidiary’sstatementsofoperationsshouldberestatedtoconstantamountsasofthe
reportingdate,inwhichcase,boththebalancesheetaccountsandthestatementsofoperationsaccountswouldbetranslatedtopesosat
theclosingexchangeratesoftheyear.
Themostsignicantclosingexchangeratesandtheapproximateaverageexchangeratesforbalancesheetaccountsandincomestatement
accounts,asofDecember312013,2012and2011,wereasfollows:
2013 2012 2011
Currency Closing Average Closing Average Closing Average
Dollar 13.0500 12.8500 12.8500 13.1500 13.9600 12.4800
Euro 17.9554 17.1079 16.9615 16.9688 18.1017 17.4204
BritishPoundSterling 21.6167 20.1106 20.8841 20.9373 21.6939 20.0321
ColombianPeso 0.0068 0.0068 0.0073 0.0073 0.0072 0.0067
EgyptianPound 1.8750 1.8600 2.0233 2.1590 2.3151 2.0952
PhilippinePeso 0.2940 0.3014 0.3130 0.3125 0.3184 0.2886
Thenancialstatementsofforeignsubsidiariesareinitiallytranslatedfromtheirfunctionalcurrenciesintodollarsandsubsequentlyintopesos.
Therefore,theforeignexchangeratespresentedinthetableabovebetweenthefunctionalcurrencyandthepesorepresenttheexchange
ratesresultingfromthismethodology.ThepesotoU.S.dollarexchangerateusedbyCEMEXisanaverageoffreemarketratesavailableto
settleitsforeigncurrencytransactions.Nosignicantdifferencesexist,inanycase,betweentheforeignexchangeratesusedbyCEMEXand
thoseexchangeratespublishedbytheMexicanCentralBank.
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