2020 Annual Report
2020 ANNUAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
MEGACABLE.
As at December 31, 2020 and 2019, the Company has not made any of the irrevocable appointments described above.
Financial liabilities-
i. Initial measurement and recognition
Financial liabilities-including accounts payable-are initially recognized when these liabilities are issued or assumed, both
contractually.
Unless they are an account payable without a material financing component, financial liabilities are initially measured and
recognized at their fair value plus, in the case of financial liabilities not measured at fair value with changes in it, carried
through comprehensive income, the transaction costs directly attributable to its acquisition or issue, when they are
subsequently measured at amortized cost.
Financial liabilities are initially recognized at fair value and subsequently measured at their amortized cost.
ii. Derecognition
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The
Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are
substantially different. In this case, a new financial liability is recognized at fair value based on the new terms and conditions.
At the time of derecognition of a financial liability, the difference between the carrying amount of the extinguished financial
liability and the consideration paid (including non-cash assets transferred or liabilities assumed) is recognized in profit and loss.
(j)
Offsetting of financial instruments-
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when
there is a legally enforceable right to set off the amounts and the intention to either to settle them on a net basis or to realize the
asset and settle the liability simultaneously The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or counterparty.
Impairment of financial assets measured at amortized cost-
(k)
The Company uses the impairment model based on expected credit losses, applicable to the financial assets subject to such
evaluation. The expected credit losses on these financial assets are estimated from the origin of the asset on each reporting
date, taking as a reference the historical experience of the Company's credit losses, adjusted for factors that are specific to
the debtors or groups of debtors, the general economic conditions and an evaluation of both the current direction and the
forecast of future conditions.
Evidence of impairment may include indications that debtors or a group of debtors are experiencing significant financial
difficulties, failure to pay or late payment of interest, the likelihood of bankruptcy or financial reorganization, as well as when
observable data indicates that there is a measurable decrease in estimated future cash flows, such as changes in economic
conditions correlated to non-payments.
For the loans and receivables category, the amount of the loss is the difference between the book value of the assets and the
present value of the estimated future cash flows (excluding future credit losses that have not yet been incurred) discounted
at the original effective interest rate of the financial asset. The book value of the asset is decreased, and the amount of the
loss is recognized in the consolidated income statement. If a loan or investment held to maturity has a variable interest rate,
the discount rate to measure any impairment loss is the current effective interest rate defined by the contract. The Group can
measure impairment on the basis of the fair value of a financial instrument using its observable market price.
If, in a later period, the amount of the impairment loss decreases and said decrease is objectively related to an event
that occurred after the date on which the impairment was recognized (such as an improvement in the credit quality of
the debtor), the reversal of the impairment loss previously recognized is recognized in the consolidated statement of
comprehensive income.
(1)
Inventories-
The inventory is basically made up of consumable operating material and some spare parts that are used to guarantee the
adequate maintenance of the cable signal system (network) in the normal course of business. Important spare parts and
permanent maintenance equipment, which the Group expects to use for more than one period, and that could only be used
in connection with a fixed asset, are recognized as part of the property, networks, and equipment line item. Inventories are
recorded at acquisition cost or at their net realizable value, whichever is less. The cost is determined using the average cost
method. The net realization value is the estimated sale price in the normal course of business less the corresponding variable
selling costs. See Note 7.
(m)
Property, networks, and equipment-
Property, networks and equipment are expressed at historical costs, less depreciation. Historical cost includes the expenses
that are directly attributable to the acquisition of said assets. See Note 10.
Costs related to a line item incurred subsequent to initial recognition are capitalized, as part of that item or a separate item,
as appropriate, only when it is probable that future economic benefits will flow to the Group and that it is able to reliably
measure the cost. It should be noted that the Group builds most of its cable system networks and facilities and the internal
costs, such as labor costs in construction projects and directly associated redistribution and adaptation expenses so that the
asset is in place and in the conditions necessary for that work are capitalized when they generate future economic benefits.
Thus, new customer connections costs in the mass cable market are capitalized as part of fixed assets, considering as cost
of connection the cost of materials and labor incurred while extending the network to the customer's home.
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