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Non-derivative financial instruments are initially recog-
nized at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transaction
costs. After initial recognition, non-derivative financial
instruments are measured as described below.
Cash and cash equivalents
Cash and cash equivalents comprise the cash and deposits
withdrawable on demand with a remaining term of no
more than three months, whereby the risk of changes in
the fair value is negligible. Bank overdrafts that are
repayable on demand, which are an integral part of the
Group’s cash management are viewed as part of cash and
cash equivalents in the presentation of the cash flow
statement.
Financial assets available for sale - Investments in equity
securities
Investments in equity securities consist of participating
interests in entities over which the Group has no control or
no significant influence.
These equity securities are classified as financial assets
available for sale and recorded at fair value on initial
recognition, except for equity securities not listed on an
active market and for which the fair value cannot reliably
be determined. Participating interests not eligible for
valuation at fair value are recorded at historical cost.
Profits and losses resulting from the change in fair value
of a participating interest classified as a financial asset
available for sale and which is not hedged are taken
directly into equity. When the investment is sold, received
or otherwise transferred, or when the carrying amount of
the investment is impaired, the accumulated profit or loss
previously included in equity is transferred to the income
statement.
The fair value of financial assets available for sale is their
listed bid price on the balance sheet date.
Other non-derivative financial instruments
Other non-derivative financial instruments are measured
at amortized cost using the effective interest rate method
less any impairment losses.
Share capital
Ordinary shares
are classified as equity. Additional costs
which are directly attributable to the issue of ordinary
shares and share options are deducted from equity, after
deducting any tax effects.
Treasury shares
: Where share capital classified as equity
is reacquired by the Company, the amount paid, including
directly attributable costs, is viewed as a change in equity.
Purchase of treasury shares is recognized as a deduction
from equity. The profit or loss pursuant to the sale or
cancellation of treasury shares is directly recognized in
equity.
Dividends
are recognized as amounts payable in the
period in which they are declared.
Derivative financial instruments
The Group uses derivative financial instruments to
manage the exchange rate and interest risks deriving
from operational, financial and investment activities.
Under its treasury management policy the Group does
not use derivative financial instruments for trading
purposes. Derivative financial instruments that do not
meet the requirements of hedge accounting are, however,
accounted for in the same way as derivatives held for
trading purposes.
Derivative financial instruments are initially measured at
fair value. Attributable transaction costs are expensed in
the income statement as incurred. Subsequent to initial
recognition these instruments are measured at fair value.
The accounting treatment of the resulting profits or
losses depends on the nature of the derivative financial
instrument.
The fair value of derivative financial instruments is the
estimated amount that the Group will obtain or pay on
the balance sheet date to end of the contract in question,
with reference to present interest and exchange rates
and the creditworthiness of the counterparty.
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05 / FINANCIAL REPORT
KINEPOLIS GROUP
ANNUAL REPORT 2014