Cemex 2013 Annual Report Download - page 56
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Please find page 56 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 consolidated financial statements
ThegeographicoperatingsegmentsreportedbyCEMEX(note4),representCEMEX’sgroupsofCGUstowhichgoodwillhasbeenallocated
forpurposesoftestinggoodwillforimpairment.Inarrivingatthisconclusion,CEMEXconsidered:a)thataftertheacquisition,goodwillwas
allocatedatthelevelofthegeographicoperatingsegment;b)thattheoperatingcomponentsthatcomprisethereportedsegmenthave
similareconomiccharacteristics;c)thatthereportedsegmentsareusedbyCEMEXtoorganizeandevaluateitsactivitiesinitsinternal
informationsystem;d)thehomogeneousnatureoftheitemsproducedandtradedineachoperativecomponent,whichareallusedbythe
constructionindustry;e)theverticalintegrationinthevaluechainoftheproductscomprisingeachcomponent;f)thetypeofclients,which
aresubstantiallysimilarinallcomponents;g)theoperativeintegrationamongcomponents;andh)thatthecompensationsystemofaspecic
countryisbasedontheconsolidatedresultsofthegeographicsegmentandnotontheparticularresultsofthecomponents.Inaddition,the
countrylevelrepresentsthelowestlevelwithinCEMEXatwhichgoodwillismonitoredforinternalmanagementpurposes.
Impairmenttestsaresignicantlysensitiveto,amongotherfactors,theestimationoffuturepricesofCEMEX’sproducts,thedevelopmentof
operatingexpenses,localandinternationaleconomictrendsintheconstructionindustry,thelong-termgrowthexpectationsinthedifferent
markets,aswellasthediscountratesandthegrowthratesinperpetuityapplied.Forpurposesofestimatingfutureprices,CEMEXuses,to
theextentavailable,historicaldataplustheexpectedincreaseordecreaseaccordingtoinformationissuedbytrustedexternalsources,such
asnationalconstructionorcementproducerchambersand/oringovernmentaleconomicexpectations.Operatingexpensesarenormally
measuredasaconstantproportionofrevenues,followingpastexperience.However,suchoperatingexpensesarealsoreviewedconsidering
externalinformationsourcesinrespecttoinputsthatbehaveaccordingtointernationalprices,suchasgasandoil.CEMEXusesspecicpre-
taxdiscountratesforeachgroupofCGUstowhichgoodwillisallocated,whichareappliedtodiscountpre-taxcashows.Theamountsof
estimatedundiscountedcashowsaresignicantlysensitivetothegrowthrateinperpetuityapplied.Likewise,theamountsofdiscounted
estimatedfuturecashowsaresignicantlysensitivetotheweightedaveragecostofcapital(discountrate)applied.Thehigherthegrowth
rateinperpetuityapplied,thehighertheamountofundiscountedfuturecashowsbygroupofCGUsobtained.Conversely,thehigherthe
discountrateapplied,thelowertheamountofdiscountedestimatedfuturecashowsbygroupofCGUsobtained.
2L) Financial liabilities, derivative nancial instruments and fair value measurements (note 16)
Debt
Bankloansandnotespayablearerecognizedattheiramortizedcost.Interestaccruedonnancialinstrumentsisrecognizedinthebalance
sheetwithin“Otheraccountspayableandaccruedexpenses”againstnancialexpense.Duringthereportedperiods,CEMEXdidnothave
nancialliabilitiesvoluntarilyrecognizedatfairvalueorassociatedtofairvaluehedgestrategieswithderivativenancialinstruments.Direct
costsincurredindebtissuancesorborrowings,aswellasdebtrenancingornon-substantialmodicationstodebtagreementsthatdidnot
representanextinguishmentofdebt,arecapitalizedaspartoftherelateddebt’scarryingamountandamortizedasinterestexpenseaspart
oftheeffectiveinterestrateofeachtransactionoveritsmaturity.Thesecostsincludecommissionsandprofessionalfees.Costsincurred
intheextinguishmentofdebt,aswellasdebtrenancingormodicationstodebtagreementswhenthenewinstrumentissubstantially
differenttotheoldinstrumentaccordingtoaqualitativeandquantitativeanalysis,arerecognizedinthestatementsofoperationswithin
“Financialexpense”asincurred.
Capital leases
Capitalleases,inwhichCEMEXhassubstantiallyallrisksandrewardsassociatedwiththeownershipofanasset,arerecognizedasnancing
liabilitiesagainsta correspondingxedassetfor thelesserof themarketvalueofthe leasedassetandthe netpresent valueoffuture
minimum payments, using the contract’s implicit interest rate to the extent available, or the incremental borrowing cost. Among other
elements,themainfactorsthatdetermineacapitalleaseare:a)ifanownershiptitleoftheassetistransferredtoCEMEXattheexpiration
ofthecontract;b)ifCEMEXhasabargainpurchaseoptiontoacquiretheassetattheendoftheleaseterm;c)iftheleasetermcoversthe
majorityoftheusefullifeoftheasset;and/ord)ifthenetpresentvalueofminimumpaymentsrepresentssubstantiallyallthefairvalueof
therelatedassetatthebeginningofthelease.
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