2014 Registration Document and Annual Financial Report - page 183

5
Financial Statemements
Consolidated Financial Statements and Notes
Accor may also acquire minority interests in real estate companies
that own the hotel properties (land and buildings) operated by the
Group under a lease or management contract. These interests do
not entitle Accor to a seat on the real estate company’s Board,
and Accor has no right to participate in the process for developing
financial and operating policies. Consequently, they are classified as
investments in non-consolidated companies under “Other financial
investments” in the consolidated financial statements.
B. Business combinations and loss
of control – changes in scope
of consolidation
Applicable since January 1, 2010, IFRS 3 (revised) “Business
Combinations” and IAS 27 (revised) “Consolidated and Separate
Financial Statements” have led the Group to alter its accounting
treatment of business combinations and transactions with
non-controlling interests carried out on or after this date, as follows:
B.1. Business combinations
Business combinations are accounted for applying the acquisition
method:
ƒƒ
the acquisition cost is measured at the acquisition date at the fair
value of the consideration transferred, including all contingent
consideration. Subsequent changes in contingent consideration
are accounted for either through profit or loss or through other
comprehensive income;
ƒƒ
identifiable assets and liabilities acquired are measured at fair
value. Fair value measurements must be completed within one
year or as soon as the necessary information to identify and value
the assets and liabilities has been obtained.They are performed
in the currency of the acquiree. In subsequent years, these fair
value adjustments follow the same accounting treatment as the
items to which they relate;
ƒƒ
goodwill is the difference between the consideration transferred
and the fair value of the identifiable assets and liabilities assumed
at the acquisition date and is recognized as an asset in the
statement of financial position (see Note 2.C. Goodwill).
Costs related to business combinations are recognized directly
as expenses.
When a business combination is achieved in stages, the previously
held equity interest is remeasured at fair value at the acquisition
date through profit or loss. The attributable other comprehensive
income, if any, is fully reclassified in operating income.
B.2. Loss of control with residual equity interest
The loss of control while retaining a residual equity interest may
be analysed as the disposal of a controlling interest followed by
the acquisition of a non-controlling interest. This process involves,
as of the date when control is lost:
ƒƒ
the recognition of a gain or loss on disposal, comprising:
yy
a gain or loss resulting from the percentage ownership
interest sold,
yy
a gain or loss resulting from the remeasurement at fair value
of the ownership interest retained in the entity;
ƒƒ
the other comprehensive income items are reclassified in the
profit or loss resulting from the ownership interest disposed.
B.3. Purchases or disposals of non-controlling
interest
Transactions with non-controlling interests in fully consolidated
companies that do not result in a loss of control, are accounted for
as equity transactions, with no effect on profit or loss or on other
comprehensive income.
B.4. Loss of significant influence while retaining
a residual interest
The loss of significant interest while retaining a residual interest
may be analyzed as the disposal of shares accounted for by the
equity method followed by the acquisition of a financial asset.This
process involves, as of the date of disposal:
ƒƒ
the recognition of a gain or loss on disposal, comprising:
yy
a gain or loss resulting from the percentage ownership interest
sold, and,
yy
a gain or loss resulting from the remeasurement at fair value
of the retained percentage ownership interest;
ƒƒ
the reclassification in profit of all of the other comprehensive
income items.
B.5. Acquisitions of asset portfolios
As part of its strategy, the Group may acquire hotels that were
previously operated under leases.These acquisitions are generally
treated as asset acquisitions other than business combinations as
the strategic business processes (
i.e.
hotel operations) and the
generation of economic benefits (
i.e.
revenues from hotel operations)
are already controlled by Accor.
When asset portfolios are acquired, the assets and liabilities are
initially recognized at cost including transaction expenses. No
deferred taxes are recognized, in accordance with IAS 12.
C. Goodwill
C.1. Positive goodwill
Goodwill, representing the excess of the cost of a business
combination over the Group’s interest in the net fair value of the
identifiable assets and liabilities acquired at the acquisition date,
is recognized in assets under “Goodwill”. Residual goodwill mainly
results from the expected synergies and other benefits arising from
the business combination.
In accordance with IFRS 3 (revised), which is applicable to business
combinations carried out on or after January 1, 2010, each time
it acquires less than 100% interest in an entity, the Group must
choose whether to recognize goodwill:
ƒƒ
by the full goodwill method (
i.e.
on a 100% basis): in this case,
non-controlling interests are measured at fair value and goodwill
attributable to non-controlling interests is recognized in addition
to the goodwill recognized on the acquired interest;
Registration Document 2014
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