Septiembre 2011

Recognition of changes in value of the instrument

Fair value hedge
Cash flow hedge
Hedge of a net
investment in a foreign operation
Hedges the exposure to changes in fair value of recognised assets and liabilities or unrecognised
firm commitments attributable to a particular risk.
Hedges the exposure to variability in cash flows that is attributable to a particular risk associated with recognised assets or liabilities or highly probable forecast transactions.
Hedges the foreign currency risk of subsidiaries, associates, joint ventures and branches whose business activities are based or carried on in a functional currency
other than the reporting currency of the financial statements.
Profit or loss.

Temporarily in equity

Operations without an independent legal

personality and branches: Temporarily in equity (on the sale or disposal of the operation they are
recognised in profit or loss)
Subsidiaries, jointly controlled entities and associates: same treatment as for the exchange rate component of fair value hedges.

Inventories

Inventories

Inventories are recognised initially at acquisition or production cost.

In addition to the amount billed by the seller, acquisition cost also includes the additional expenses incurred until the goods are located at their point of sale (transport, insurance, customs duties and other direct costs).

Production cost is determined by adding the costs directly attributable to the goods to the cost of acquisition of raw materials and similar items, plus the reasonable portion of the costs indirectly allocable to the related goods, to the extent that they relate to the production period and are based on the level of use or the normal working capacity of the means of production.

For inventories that need more than twelve months to get ready for sale, acquisition or production cost includes borrowing costs in accordance with the provisions of the standard on property, plant and equipment.

In general, the cost of inventories is assigned using the weighted average cost formula. The FIFO method is also acceptable. The cost of inventories of items that are not ordinarily interchangeable are assigned by using specific identification of their individual costs.

Inventories
Inventories are subsequently measured at the lower of acquisition or production cost and net realisable value, recognising the appropriate write-downs through the income statement.

Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.