Cemex 2013 Annual Report Download - page 58
Download and view the complete annual report
Please find page 58 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
Theconceptofexitvalueispremisedontheexistenceofamarketandmarketparticipantsforthespecicassetorliability.Whenthereisno
marketand/ormarketparticipantswillingtomakeamarket,IFRS13establishesafairvaluehierarchythatprioritizestheinputstovaluation
techniquesusedtomeasurefairvalue.Thehierarchygivesthehighestprioritytounadjustedquotedpricesinactivemarketsforidentical
assetsor liabilities (Level1 measurements) andthelowestpriority tomeasurements involving signicantunobservable inputs(Level 3
measurements).Thethreelevelsofthefairvaluehierarchyareasfollows:
• Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthatCEMEXhastheabilitytoaccess
atthe measurement date.Aquotepriceinan active market provides themost reliable evidenceoffairvalueand isused without
adjustmenttomeasurefairvaluewheneveravailable.
• Level2inputsareinputsotherthanquotedpricesinactivemarketsthatareobservablefortheassetorliability,eitherdirectlyor
indirectly,andareusedmainlytodeterminethefairvalueofsecurities,investmentsorloansthatarenotactivelytraded.Level2inputs
includedequityprices,certaininterestratesandyieldcurves,impliedvolatility,creditspreadsandothermarketcorroboratedinputs,
includinginputsextrapolatedfromotherobservableinputs.IntheabsenceofLevel1inputsCEMEXdeterminedfairvaluesbyiteration
oftheapplicableLevel2inputs,thenumberofsecuritiesand/ortheotherrelevanttermsofthecontract,asapplicable.
• Level3 inputsareunobservable inputsforthe assetor liability.CEMEXused unobservable inputstodeterminefairvalues, tothe
extenttherearenoLevel1orLevel2inputs,invaluationmodelssuchasBlack-Scholes,binomial,discountedcashowsormultiplesof
OperativeEBITDA,includingriskassumptionsconsistentwithwhatmarketparticipantswouldusetoarriveatfairvalue.
2M) Provisions
CEMEXrecognizesprovisionswhenithasalegalorconstructiveobligationresultingfrompastevents,whoseresolutionwouldimplycash
outowsorthedeliveryofotherresourcesownedbytheCompany.AsofDecember31,2013and2012somesignicantproceedingsthat
gaverisetoaportionofthecarryingamountofCEMEX’sothercurrentandnon-currentliabilitiesandprovisionsaredetailedinnote24A.
Restructuring (note 17)
CEMEX recognizes provisions for restructuring costs only when the restructuring plans have been properly nalized and authorized by
management,andhavebeencommunicatedtothethirdpartiesinvolvedand/oraffectedbytherestructuringpriortothebalancesheet
date.TheseprovisionsmayincludecostsnotassociatedwithCEMEX’songoingactivities.
Asset retirement obligations (note 17)
Unavoidableobligations,legalorconstructive,torestoreoperatingsitesuponretirementoflong-livedassetsattheendoftheirusefullives
aremeasuredatthenetpresentvalueofestimatedfuturecashowstobeincurredintherestorationprocess,andareinitiallyrecognized
againsttherelatedassets’bookvalue.Theincreasetotheassets’bookvalueisdepreciatedduringitsremainingusefullife.Theincreasein
theliabilityrelatedtothepassageoftimeischargedtothelineitem“Othernancialexpenses,net.”Adjustmentstotheliabilityforchanges
inestimationsarerecognizedagainstxedassets,anddepreciationismodiedprospectively.Theseobligationsarerelatedmainlytofuture
costsofdemolition,cleaningandreforestation,sothatquarries,maritimeterminalsandotherproductionsitesareleftinacceptablecondition
attheendoftheiroperation.
Costs related to remediation of the environment (notes 17 and 24)
Provisionsassociatedwithenvironmentaldamagerepresenttheestimatedfuturecostofremediation,whicharerecognizedattheirnominal
valuewhenthetimescheduleforthedisbursementisnotclear,orwhentheeconomiceffectforthepassageoftimeisnotsignicant;
otherwise,suchprovisionsarerecognizedattheirdiscountedvalues.Reimbursementsfrominsurancecompaniesarerecognizedasassets
onlywhentheirrecoveryispracticallycertain.Inthatcase,suchreimbursementassetsarenotoffsetagainsttheprovisionforremediation
costs.
Contingencies and commitments (notes 23 and 24)
Obligations or losses related to contingencies are recognized as liabilities in the balance sheet when present obligations exist resulting
frompasteventsthatareexpectedtoresultinanoutowofresourcesandtheamountcanbemeasuredreliably.Otherwise,aqualitative
disclosureisincludedinthenotestothenancialstatements.Theeffectsoflong-termcommitmentsestablishedwiththirdparties,such
assupplycontractswithsuppliersorcustomers,arerecognizedinthenancialstatementsonanincurredoraccruedbasis,aftertakinginto
considerationthesubstanceoftheagreements.Relevantcommitmentsaredisclosedinthenotestothenancialstatements.TheCompany
doesnotrecognizecontingentrevenues,incomeorassets,unlesstheirrealizationisvirtuallycertain.
[57]