2014 Registration Document and Annual Financial Report - page 187

5
Financial Statemements
Consolidated Financial Statements and Notes
In accordance with IFRS 5 “Non-Current Assets Held for Sale and
Discontinued Operations”, assets or group of assets held for sale
are presented separately on the face of the statement of financial
position, at the lower of their carrying amount and fair value less
costs to sell.
This item groups together:
ƒƒ
non-current assets held for sale;
ƒƒ
groups of assets held for sale;
ƒƒ
the total current and non-current assets related to a business
or geographical segment (
i.e.
to a discontinued operation) itself
held for sale.
F. Inventories
Inventories are measured at the lower of cost and net realizable
value, in accordance with IAS 2 “Inventories”. Cost is determined
by the weighted average cost method.
G. Prepaid expense
Prepaid expense corresponds to expenses paid during the period
that relate to subsequent periods. They also include the effect of
recognizing rental expense on a straight-line basis over the life of
the lease. Prepaid expense is included in “Other receivables and
accruals”.
H. Employee benefits expense
Employee benefits expense includes all amounts paid or payable
to employees, including statutory and discretionary profit-sharing,
pension contributions, payroll taxes and the cost of share-based
payments.
A “Crédit d’Impôt pour la Compétitivité et l’Emploi” (CICE) tax
credit was introduced in the 3
rd
2012 Rectified Finance Act with the
aim of making French businesses more competitive by reducing
labor costs for certain employees.The CICE consists in substance
of a government grant to be spent by companies on measures
to improve their competitiveness. It is therefore accounted for in
accordance with IAS 20 “Accounting for Government Grants and
Disclosure”. As allowed under IAS 20, the Group has chosen to record
it as a deduction from the related expenses,
i.e.
as a deduction
from payroll costs. The CICE recorded in the December 31, 2014
financial statements in respect of previously recognized payroll
costs amounts to €18.8 million; it amounted to €10.5 million at
December 31, 2013.
I. Provisions
In accordance with IAS 37 “Provisions, Contingent Liabilities and
Contingent Assets”, a provision is recognized when the Group
has a present obligation (legal, contractual or implicit) as a result
of a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation. Provisions are determined based on the best estimate
of the expenditure required to settle the obligation, in application
of certain assumptions. Provisions are discounted when the effect
of the time value of money is material, using a discount rate that
reflects current market assessments of the time value of money.
The most commonly applied rates are the prime long-term corporate
bond rate or the government bond rate.
Provisions for restructuring costs are recorded when the Group
has a detailed formal plan for the restructuring and the plan’s main
features have been announced to those affected by it as of the
close of accounts.
J. Pensions and other post-employment
benefits
The Group offers various supplementary pension, length-of-service
award and other post-employment benefit plans, in accordance
with the laws and practices of the countries where it operates.
These plans are either defined contribution or defined benefit plans.
Under defined contribution plans, the Group pays fixed contributions
into a separate fund and has no legal or constructive obligation to
pay further contributions if the fund does not hold sufficient assets
to pay benefits. Contributions under these plans are recognized
immediately as an expense.
For defined benefit plans, under which the Group has a legal or
constructive obligation to provide agreed benefits to current and
future employees in exchange for a given level of service (including
multi-employer plans when the manager is able to provide the
necessary information), the Group’s obligations are determined in
accordance with IAS 19 “Employee Benefits”.
The Group’s obligation is determined by the projected unit credit
method based on actuarial assumptions related to future salary levels,
retirement age, mortality, staff turnover and the discount rate.These
assumptions take into account the macro-economic environment
and other specific conditions in the various host countries.
Pension and other retirement benefit obligations take into account
the market value of plan assets. The amount recognized in the
statement of financial position corresponds to the discounted
present value of the defined benefit obligation less the fair value
of plan assets. Any surpluses, corresponding to the excess of the
fair value of plan assets over the projected benefit obligation, are
recognized only when they represent the present value of any
economic benefits available in the form of refunds from the plan
or reductions in future contributions to the plan.
Current service cost, past service cost, administrative expense, taxes
for the year, and paid contributions and benefits are recognized in
operating expense, whereas net interest on the net defined benefit
liability (asset) is recognized in financial expense (income).
For post-employment benefits, actuarial gains and losses arising
from changes in actuarial assumptions and experience adjustments
are recognized immediately in equity. However, actuarial gains and
losses on long-term benefit obligations towards active employees
(such as jubilees, seniority bonuses…) are recognized directly in
profit or loss in net financial expense.
The net defined benefit obligation is recognized in the statement
of financial position under “Non-current Provisions”.
Registration Document 2014
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