IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 starting from this similar to that provided for in IAS 39, including the treatment of the respective interest. The carrying amount of the asset is reduced and the amount of losses recognized in the income statement. If, in a subsequent period, the amount of impairment decreases, the amount of impairment losses previously recognized is also reversed in the income statement if the decrease in that impairment is objec- tively related to the event after the initial recognition. a) Accounts receivable from customers The Group applies the simplified method and records expected loss to maturity for all its accounts receivable, including those that include a significant financial compo- nent. Estimated expected losses were calculated based on the experience of actual losses over a period that, by business or type of customer, were considered statisti- cally significant and representative of the specific characteristics of the underlying credit risk. 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. 2.11 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 busi- ness operations, minus variable sale costs. 2.12 ACCOUNTS RECEIVABLE AND OTHER DEBTORS AND ACCOUNTS PAYABLE TO SUPPLIERS AND OTHER CREDITORS Accounts receivable and other debtors are initially recognised at the fair value. Me- dium 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. 325