2014 Registration Document and Annual Financial Report - page 184

Financial Statemements
Consolidated Financial Statements and Notes
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by the partial goodwill method (
i.e.
based on the percentage
interest acquired, with no change possible later in the event
of an additional interest being acquired that does not transfer
control): in this case, non-controlling interests are measured as
the non-controlling interest’s proportionate share of the acquiree’s
identifiable net assets and goodwill is only recognized for the
share acquired.
Goodwill arising on the acquisition of associates – corresponding to
companies over which the Group exercises significant influence – is
included in the carrying amount of the associate concerned.
Goodwill arising on the acquisition of subsidiaries and jointly
controlled entities is reported separately.
In accordance with IFRS 3 (revised) “Business Combinations”,
goodwill is not amortized but is tested for impairment at least once
a year and more frequently if there is any indication that it may
be impaired. The methods used to test goodwill for impairment
are described in Note 2.E.6. If the carrying amount of goodwill
exceeds its recoverable amount, an irreversible impairment loss
is recognized in profit.
C.2. Negative goodwill
Negative goodwill, representing the excess of the Group’s interest
in the net fair value of the identifiable assets and liabilities acquired
at the acquisition date over the cost of the business combination,
is recognized immediately in profit.
C.3. Reallocation of goodwill following
reorganizations
IAS 36, paragraph 87, states that if an entity reorganizes its reporting
structure in a way that changes the composition of one or more
cash-generating units to which goodwill has been allocated, the
goodwill must be reallocated to the units affected based on the
relative values of the units’ discounted cash flows.
D. Foreign currency translation
The presentation currency is the euro.
The statements of financial position of foreign subsidiaries are
translated into euros at the closing exchange rate, and their income
statements are translated at the average rate for the period. Differences
arising from translation are recorded as a separate component of
equity and recognized in profit on disposal of the business.
Accor did not have any subsidiaries operating in hyperinflationary
economies in any of the periods presented.
E. Non-current assets
E.1. Intangible assets
In accordance with IAS 38 “Intangible Assets”, intangible assets
are measured at cost less accumulated amortization and any
accumulated impairment losses.
Brands and lease premiums in France (droit au bail) are considered
as having indefinite useful lives because the Group considers that
there is no foreseeable limit to the period in which they can be used
and are therefore not amortized.Their carrying amount is reviewed at
least once a year and more frequently if there is any indication that
they may be impaired. If their fair value is less than their carrying
amount, an impairment loss is recognized (see Note 2.E.6).
Other intangible assets (licenses and software) are considered as
having finite useful lives.They are amortized on a straight-line basis
over their useful lives.
The clientele of hotels outside France is generally amortized over
the life of the underlying lease.
Identifiable intangible assets recognized in a business combination are
initially recognized at amounts determined by independent valuations,
performed using relevant criteria for the business concerned that
can be applied for the subsequent measurement of the assets.
Identifiable brands are measured based on multiple criteria, taking
into account both brand equity and their contribution to profit.
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:
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its intention to complete the intangible asset and the availability of
adequate technical, financial and other resources for this purpose;
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how the intangible asset will generate probable future economic
benefits;
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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.
Registration Document 2014
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