ANNUAL INTEGRATED REPORT 2021
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ANNUAL INTEGRATED REPORT 2021 | AXTEL
r. Provisions
Liability provisions represent a present legal obligation or a
constructive obligation as a result of past events where an outflow
of resources to meet the obligation is likely and where the amount
has been reliably estimated. Provisions are not recognized for
future operating losses.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax rate
that reflects current market assessments of the value of money
over time and the risks specific to the obligation. The increase in
the provision due to the passage of time is recognized as interest
expense.
When there are similar obligations, the likelihood that an outflow
will be required in settlement is determined by considering the
class of obligations as a whole. A provision is recognized even if
the likelihood of an outflow with respect to any one item included
in the same class of obligations may be remote.
A restructuring provision is recorded when the Company has
developed a formal detailed plan for the restructure, and a valid
expectation for the restructure has been created between the people
affected, possibly for having started the plan implementation or for
having announced its main characteristics to them.
s. Share-based payments
The Company has compensation plans that are based on the
market value of shares of Alfa and Axtel, granted to certain
senior executives of the Company. The conditions for granting
such compensation to the eligible executives include compliance
with certain financial metrics such as level of profit achieved
and remaining in the Company for up to 5 years, among other
requirements. Alfa's Board of Directors has appointed a Technical
Committee to manage the plan, and it reviews the estimated
cash settlement of this compensation at the end of the year. The
payment of the plan is always subject to the discretion of Alfa's
senior management. Adjustments to this estimate are charged or
credited to the consolidated statement of income.
Fair value of the amount payable to employees in respect of share-
based payments, which are settled in cash, is recognized as an
administrative expense in the consolidated statement of income,
with a corresponding increase in liabilities, over the period of
service required. The liability is included within other liabilities and
is adjusted at each reporting date and at settlement date. Any
change in the fair value of the liability is recognized as an expense
in the consolidated statement of income.
t. Treasury shares
The Company's stockholders periodically authorize a maximum
amount for the acquisition of the Company's own shares. Upon the
occurrence of a repurchase of its own shares, they become treasury
shares and the amount is presented as a reduction to stockholders'
equity at the purchase price. These amounts are stated at their
historical value.
u. Capital stock
Axtel's common shares are classified as capital stock within
stockholders' equity. Incremental costs directly attributable to the
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