Doing Business

Doing Business in Mexico 2015

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104 Tax and Legal Services - PwC Mexico Capital stock is shown at par or stated value, partially restated as indicated above. Any excess is shown separately as a premium on issuance of capital stock. Additional contributions by stockholders are usually shown as such. Treasury shares are shown as a deduction from capital stock in the consolidated balance sheet. Stock dividends paid are recorded by transferring the appropriate amounts from retained earnings to capital stock (and possibly premium on issuance of capital stock). Stock splits would not affect the amount of capital stock. No value is attributed to shares authorized but unissued. Revelant aspects in Financial Reporting Some important aspects according to Mexican Financial Reporting Standards are shown below: Marketable securities Marketable securities held as temporary investments are stated at market value and gains or losses on valuation are included in income. Long-term investments These investments, comprising investments in debt and capital securities, are classified in the following categories in accordance with management's intention at the date of acquisition: investments to be held to maturity, financial instruments held for trading, and financial instruments available for sale. They are initially stated at acquisition cost and are subsequently stated as described below: (i) Debt securities to be held to maturity are stated at acquisition cost reduced by amortization of premiums or increased by amortization of discounts, as applicable. Any permanent decrease in value is recognized when appropriate, with charge to income. (ii) Financial instruments held for trading and those available for sale are stated at fair value, which is similar to market value. Changes in the fair value of financial instruments held for trading are charged or credited directly to income. Changes in the fair value of financial instruments available for sale are included in stockholders equity as part of comprehensive income until the instruments are sold or reclassified, at which time amounts included in comprehensive income are transferred to income for the year. Inventories Inventories should be valued at the lesser cost of the cost or net realizable value. Property, plant and equipment Property, plant and equipment are carried at partially restated cost less accumulated depreciation (except that land is not depreciated). Cost includes the comprehensive financing cost (see "Accounting for inflation") incurred during the construction or installation period. As explained under "Accounting for inflation", until December 31, 2007, all property, plant and equipment were restated for inflation. Assets of Mexican and foreign origin were restated by applying factors derived from the NCPI to their cost or their appraisal value at December 31, 1996. Assets of foreign origin could optionally be restated by applying factors derived from the general inflation index of the country of origin to the assets' cost expressed in the corresponding foreign currency and translating the

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