IBERSOL | Annual Report 2020

Consolidated Financial Statements its software that each hedge instrument is followed under the Group’s risk policy, re- cording thorough and formally the hedges relationships; the hedges goal and strat- egy; classification of the hedges relationship; description of the nature of the risk that’s being cover; identification of the hedge instrument and covered item; descrip- tion of initial measure and future effectiveness of the hedge; identification of the excluded, if any, part of the hedge instrument. The Group will consider discontinued an hedge instrument when it is sold, expires or is realised; the hedge ceases to fulfil the hedge accounting criteria; for the cash flow hedge the expected transaction in unlikely or unexpected; the Group cancels the hedge instruments for managing reasons. 2.23 SUBSIDIARIES WHERE THE WORKING CURRENCY IS A CURRENCY OF A HYPERINFLATIONARY ECONOMY Due to the fact that Angola in 2019 has failed to meet the conditions established in IAS 29 to be considered a hyperinflationary economy, the Group has suspended the application of that standard to the financial statements of companies in that coun- try since 1 January 2019. The impacts determined in fiscal periods previous results resulting from this standard, namely those associated with non-monetary assets and liabilities, will remain in effect until the assets are disposed of, consumed or amor- tized and until the liabilities are disposed of or liquidated. Accordingly, IAS 29 was applied in 2017 and 2018, according to which the financial statements of a subsidiary that reports in the currency of a hyperinflationary economy need to be restated by applying a general price index of the country in whose currency it is reports before they are included in the consolidated financial statements. 2.24 CONSOLIDATED STATEMENT OF CASH FLOWS The Cash Flow Statement is prepared using the direct method, through which cash receipts and payments in operating, investing and financing activities are disclosed. Operating activities include receipts from customers, payments to suppliers, pay- ments to personnel and others related to operating activity, namely income tax. Investment activities include, in particular, acquisitions and disposals of investments in subsidiaries, payments and receipts arising from the purchase and sale of assets and receipts of interest and dividends. Financing activities include payments and re- ceipts related to loans obtained, finance lease contracts, interest paid and dividend payments. 332