2013 Registration document and annual financial report - page 260

Registration Document 2013
Financial Statemements
Consolidated Financial Statements And Notes
Net provision expense – corresponding to increase in provisions less reversals of utilized and unutilized provisions set up in prior periods –
is recorded under the following income statement captions:
(in millions of euros)
Dec. 2012
Dec. 2013
Finance cost, net
Provision for losses on hotel properties
Provision on other assets and restructuring provisions
Provision for tax
Provisions for pensions and other post-
employment benefits
A. Description of the plans
Group employees receive various short-term benefits (paid vacation,
paid sick leave and profit-shares), long-term benefits (long-service
awards, long-term disability benefits, loyalty bonuses and seniority
bonuses), as well as various post-employment benefits provided
under defined contribution and defined benefit plans (length-of-service
awards payable on retirement, pension benefits).
Short-term benefit obligations are recognized in the statements of
financial position of the Group entities concerned.
Post-employment benefits are provided under either defined
contribution or defined benefit plans.
Defined contribution plans
Obligations under these plans are funded by periodic contributions
to external organizations that are responsible for the administrative
and financial management of the plans. The external organization
is responsible for all benefit payments and the Group has no
liability beyond the payment of contributions. Examples of defined
contribution plans include the government-sponsored basic pension
and supplementary pension (ARRCO/AGIRC) schemes in France
and defined contribution pension schemes in other countries.
Contributions to these plans are recognized in the period to which
they relate.
Defined benefit plans
Benefits paid under the Group’s defined benefit plans are determined
based on employees’ years of service with the Group.The benefit
obligation is generally funded by plan assets, with any unfunded
portion recognized as a liability in the statement of financial position.
The defined benefit obligation (DBO) is determined by the projected
unit credit method, based on actuarial assumptions concerning
future salary levels, retirement age, mortality rates, staff turnover
rates and the discount rate. These assumptions take into account
the macro-economic situation and other specific circumstances in
each host country and region.
Actuarial gains and losses arising fromchanges in actuarial assumptions
and experience adjustments are recognized immediately in equity,
in accordance with Group accounting policy.
At Accor, the main post-employment defined benefit plans concern:
length-of-service awards in France:
These are lump-sumpayments made to employees on retirement.
They are determined by reference to the employee’s years of
service and end-of-career salary. The calculation is based on
parameters defined by Corporate Finance and Human Resources
once a year during the second half. The related obligation is
covered by a provision;
length-of-service awards in Italy:
These are lump-sumpayments made to employees on retirement.
They are determined by reference to the employee’s years of
service, end-of-career salary, and whether they leave on their
own initiative or on that of the company. The related obligation
is covered by a provision;
pensions: themain defined benefit pension plans are for employees
in France and in theWorldwide Structures (48%of the obligation),
in the Netherlands (24% of the obligation), in Belgium (9% of
the obligation) and in Switzerland (8% of the obligation). The
plan in the Netherlands is closed to new participants and is fully
funded, with the result that no provision has been recognized in
the statement of financial position for this plan. Pension benefit
obligations are determined by reference to employees’ years of
service and end-of-career salary.They are funded by payments to
external organizations that are legally separate fromAccor Group.
In the Worldwide Structures, the pension plan concerns senior
executives. Pension rights are unvested and plan participants
receive a regular pension, not a lump sum. In the Netherlands,
the plan concerns all employees and provides for the payment
of a lump sum to participants on retirement.
In 2013, the implementation of voluntary separation plans and the
departure of certain Executive Committee members led to the
recognition of a curtailment gain.
B. Actuarial assumptions
Actuarial valuations are based on a certain number of long-term
parameters supplied by the Group, which are reviewed each year.
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