CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
OPERADORA DE SITES MEXICANOS, S.A.B. DE C.V. AND SUBSIDIARIES
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Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss.
iii. Offsetting of financial instruments
The Company may offset a financial asset and a financial liability and present the net amount in its statement of financial position only when:
(i) it has the right and legal obligation to receive or pay an offsetting amount, therefore the Company has, in fact, an offsetting financial asset or liability; and
(ii) the net amount resulting from offsetting the financial asset and the financial liability reflects the Company's expected cash flows from settling two or more separate financial
instruments.
iv. Fair value of financial instruments
The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid
price for long positions and ask price for short positions), without any deduction for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm's-length
market transactions; reference to the current fair value of another financial instrument that is substantially the same; a discounted cash flow analysis or other valuation models.
The hierarchy used for determining fair values is as follows:
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Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;
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Level 2: Variables other than the quoted prices included in level 1 that are observable for assets or liabilities, either directly (prices) or indirectly (price derivatives); and
Level 3: Variables used for assets or liabilities that are not based on observable market data (unobservable variables).
Note 10 provides an analysis of the fair values of the Company's financial instruments.
f) Cash and cash equivalents
Cash in banks earns interest at floating rates on daily account balances. Cash equivalents are represented by short-term deposits made for terms ranging from one day to three days,
and which bear interest at rates common for each type of short-term investment. These investments are stated at cost plus accrued interest, which is similar to their market value.
g) Current versus non-current classification
The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:
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Expected to be realized within twelve months after the reporting period, or
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Cash or cash equivalent to be exchanged or used to settle a liability for at least twelve months after the reporting period.
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All other assets are classified as non-current.
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