IBERSOL | 2019 Annual Report

2019 ANNUAL REPORT b) Other amounts receivable and financial assets For assets receivable valued at amortized cost and at fair value through other com- prehensive income, the Group prepares its analyzes based on the general model. In preparing this valuation, the Group makes estimates based on the risk of default and loss rates, which require judgment. The inputs used to assess the risk of losses on these financial assets include: • credit ratings (to the extent available) obtained through information provided by rating agencies such as Standard and Poor’s and Moody’s; • significant changes in expected performance and debtor behavior; and • data extracted from the market, in particular on probabilities of non-compliance. 2.10 INVENTORIES Inventories are presented at the lowest value between their cost and the net realisa- tion value. The cost is calculated using the weighted mean cost, and it is equivalent to the acquisition cost deducted from quantity discounts. Personal alimentation costs are reflected in personnel expenses, against stocks in- ventory. The net realisation value corresponds to the estimated sale price during normal bu- siness operations, minus variable sale costs. 2.11 ACCOUNTS RECEIVABLE FROM CLIENTS AND OTHER DEBTORS AND AC- COUNTS PAYABLE TO SUPPLIERS AND OTHER CREDITORS Accounts receivable from clients and other debtors are initially recognised at the fair value. Medium and long term debts are subsequently measured at the amortised cost, using the effective rate method minus the impairment adjustment. Debts to suppliers and non-interest bearing third parties are measured at amortized cost so that they reflect their net present value. However, these amounts are not dis- counted because the effect of their financial update is considerer immaterial. 2.12 CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash, bank deposits and other investments up to 3 months that can be mobilized immediately, with a low risk of change in value. Bank overdrafts are presented in the Statement of Cash Flows as Cash and Cash Equiva- lents and in the Consolidated Statement of Financial Position in current liabilities under the Obtained Loans item. 2.13 SHARE CAPITAL Ordinary shares are classified in equity. Incremental costs directly attributable to the emission of new shares or options are presented in equity as a deduction, net of taxes, of entries. 225