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In 2015 the Company used the following type of hedge, which is accounted for as described below:
Cash flow hedges: in hedges of this nature, the portion of the gain or loss on the hedging
instrument that has been determined to be an effective hedge is recognised temporarily in equity
and is recognised in the statement of profit or loss in the same period during which the hedged
item affects profit or loss, unless the hedge relates to a forecast transaction that results in the
recognition of a non-financial asset or a non-financial liability, in which case the amounts
recognised in equity are included in the initial cost of the asset or liability when it is acquired or
assumed.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or
exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on
the hedging instrument recognised in equity is retained in equity until the forecast transaction
occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to net profit or loss for the year.
4.6 Inventories
Programme rights
Rights and programme inventories are valued, based on their nature, as follows:
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Inventoriable in-house productions (programmes produced to be re-run, such as series)
are measured at acquisition and/or production cost, which includes both external costs billed by
third parties for programme production and for the acquisition of resources and internal production
costs, which are calculated by applying pre-established internal rates on the basis of the time
during which operating resources are used in production. The costs incurred in producing the
programmes are recognised, based on their nature, under the appropriate headings in the
statement of profit or loss and are included under “Programme Rights” in the balance sheet with a
credit to “Procurements – Inventories” in the statement of profit or loss.
Amortisation of these programmes is recognised under “Programme Amortisation and Other” in
the statement of profit or loss, on the basis of the number of showings. Following the analysis
performed by the Company with respect to the actual showings of this type of programme, in 2014
a decision was made to change the estimates used in relation to the amortisation of this type of
programme; series which are broadcast weekly are amortised at 99% of the production cost when
the first showing of each episode is broadcast and at 1% when the broadcast is repeated and
series which are broadcast daily are amortised in full when first broadcast. In any event, the
maximum period for the amortisation of programmes is three years, after which the unamortised
amount is written off. Had the criteria for the consumption of these programmes not been
changed, the effect on the statement of profit or loss for 2015 would have been EUR 1 million.
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Non-inventoriable in-house productions (programmes produced to be shown only once) are
measured using the same methods and procedures as those used to measure inventoriable in-
house productions. Programmes produced and not shown are recognised at year-end under
“Programme Rights - In-House Productions and Productions in Process” in the balance sheet. The
cost of these programmes is recognised as an expense under “Programme Amortisation and
Other” in the statement of profit or loss at the time of the first showing.
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Rights on outside productions (films, series and other similar productions) are measured at
acquisition cost. These rights are deemed to have been acquired when the term of the right
commences for the Company. Payments made to outside production distributors prior to
commencement of the term of the right are recorded under “Advances to Suppliers” in the balance
sheet.
The amortisation of the rights is recognised under “Programme Amortisation and Other” in the
statement of profit or loss on the basis of the number of showings, in accordance with the rates
shown below, which are established on the basis of the number of showings contracted: