Financial liabilities correspond to the financing obtained by the Group through bank credit facilities and bonds, accounts payable to suppliers and creditors.
Bank credit facilities and bonds are initially recognized at their fair value, net of transactions cost. After initial recognition, interest-bearing credit facilities and bonds are subsequently measured at amortized cost, using the effective interest rate method. The effective interest method amortization is included as a financial expense in the statement of profit or loss.
Accounts payable to suppliers and creditors are short-term financial liabilities recorded at nominal value, since it does not significantly differ from fair value.
A financial liability is derecognized when the obligation specified in the corresponding contract is paid or expired. When an existing financial liability has been replaced by another from the same lender, under substantially different terms, or the terms of an existing liability are substantially modified, such modification is treated as the de-recognition of the original liability and recognized as a new liability. The difference between the respective carrying amounts is recognized in the statement of profit or loss.
