Registration Document 2013
Consolidated Financial Statements And Notes
Software costs incurred during the development phase are capitalized
as internally-generated assets if the Group can demonstrate all of
the following in accordance with IAS 38:
its intention to complete the intangible asset and the availability of
adequate technical, financial and other resources for this purpose;
how the intangible asset will generate probable future economic
its ability to measure reliably the expenditure attributable to the
intangible asset during its development.
At the time of signature of management or franchise contracts,
Accor may have to pay key money to the owners of the hotels.
These payments are necessary to obtain the contracts and are
qualified as intangible assets under IAS 38. Key money is amortized
over the life of the contracts to which it relates.
E.2. Property, plant and equipment
Property, plant and equipment are measured at purchase cost less
accumulated depreciation and any accumulated impairment losses,
in accordance with IAS 16 “Property, Plant and Equipment”.
Assets under construction aremeasured at cost less any accumulated
impairment losses.They are depreciated from the date when they
are put in service.
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives, determined by the components
method, from the date when they are put in service. The main depreciation periods applied are as follows:
Upscale and Midscale
Building improvements, fixtures and fittings
7 to 25 years
Capitalized construction-related costs
5 to 15 years
E.3. Borrowing costs
Borrowing costs directly attributable to the construction or production
of a qualifying asset are included in the cost of the asset. Other
borrowing costs are recognized as an expense for the period in
which they are incurred.
E.4. Leases and sale and leaseback transactions
Leases are analysed based on IAS 17 “Leases”.
Leases that transfer substantially all the risks and rewards incidental
to ownership of an asset to the lessee are qualified as finance
leases and accounted for as follows:
the leased item is recognized as an asset at an amount equal
to its fair value or, if lower, the present value of the minimum
lease payments, each determined at the inception of the lease;
a liability is recognized for the same amount, under “Finance
minimum lease payments are allocated between interest expense
and reduction of the lease liability;
the finance charge is allocated to each period during the lease
term so as to produce a constant periodic rate of interest on the
remaining balance of the liability.
The asset is depreciated over its useful life, in accordance with
Group accounting policy, if there is reasonable certainty that the
Group will obtain ownership of the asset by the end of the lease
term; otherwise the asset is depreciated by the components method
over the shorter of the lease term and its useful life.
Lease payments under operating leases are recognized as an
expense on a straight-line basis over the lease term. Future
minimum lease payments under non-cancelable operating leases
are disclosed in Note 6.
Where sale and leaseback transactions result in an operating lease
and it is clear that the transaction is established at fair value, any
profit or loss is recognized immediately. Fair value for this purpose
is generally determined based on independent valuations.
E.5. Other financial investments
Other financial investments, corresponding to investments in
non-consolidated companies, are classified as “Available-for-sale
financial assets” and are therefore measured at fair value. Unrealized
gains and losses on an investment are recognized directly in equity
(in the Fair value adjustments on Financial Instruments reserve) and
are reclassified to profit when the investment is sold. A significant
or prolonged decline in the value of the investment leads to the
recognition of an irreversible impairment loss in profit.
Equity-accounted investments in associates are initially recognized
at acquisition cost, including any goodwill.Their carrying amount is
then increased or decreased to recognize the Group’s share of the
associate’s profits or losses after the date of acquisition.