2014 Registration Document and Annual Financial Report - page 190

Financial Statemements
Consolidated Financial Statements and Notes
5
N.3. Financial liabilities hedged
by derivative instruments
Financial liabilities hedged by derivative instruments qualify for hedge
accounting. The derivative instruments are classified as either fair
value hedges or cash flow hedges.
Financial liabilities hedged by fair value hedges are measured at fair
value, taking into account the effect of changes in interest rates.
Changes in fair value are recognized in profit and are offset by
changes in the fair value of the hedging instrument.
Financial liabilities hedged by cash flow hedges are measured at
amortized cost. Changes in the fair value of the hedging instrument
are accumulated in equity and are reclassified into profit in the same
period or periods during which the financial liability affects profit.
N.4. Bank borrowings
Interest-bearing drawdowns on lines of credit and bank overdrafts
are recognized for the amounts received, net of direct issue costs.
N.5. Other financial liabilities
Other financial liabilities are measured at amortized cost. Amortized
cost is determined by the effective interest method, taking into
account the costs of the issue and any issue or redemption premiums.
O. Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand, and
short-term investments in money market instruments. These
instruments have maturities of less than three months and are
readily convertible into known amounts of cash; their exposure to
changes in value is minimal.
P. Liabilities associated with assets
classified as held for sale
In accordance with IFRS 5 “Non-Current Assets Held for Sale
and Discontinued Operations”, this item includes all the liabilities
(excluding equity) related to assets or a disposal group classified
as held for sale or to a discontinued operation (see Note 2.E.7).
Q. Put Options granted by Accor
IAS 32“Financial Instruments: disclosures and presentation” requires
that the value of the financial commitment represented by put options
granted by Accor to minority interests in subsidiaries, be recognized
as a debt.The difference between the debt and the related minority
interests in the statement of financial position, corresponding to
the portion of the subsidiary’s net assets represented by the shares
underlying the put, is recognized as goodwill. When the exercise
price is equal to the fair value of the shares, the amount of the debt
is determined based on a multiple of the EBITDA reflected in the
5-year business plan of the subsidiary concerned and is discounted.
For put options granted before January 1, 2010, changes in the debt
arising from business plan adjustments are recognized in goodwill.
Discounting adjustments are recognized in financial expense.
For put options granted on or after January 1, 2010, changes in the
debt are treated as reclassifications in equity and therefore have no
impact on profit, in accordance with IAS 27 (revised).
R. Fair value
The fair value corresponds to the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction
betweenmarket participants at themeasurement date. In accordance
with IFRS 13 “Fair value measurement”, the fair value hierarchies
have the following levels:
ƒƒ
Level 1: fair value measured by reference to quoted prices
(unadjusted) in active markets for identical assets or liabilities;
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Level 2: fair value measured by reference to inputs other than
quoted prices included within Level 1 that are observable for the
asset or liability, either directly (
i.e.
as prices) or indirectly (
i.e.
derived from prices);
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Level 3: fair value measured by reference to inputs for the
asset or liability that are not based on observable data
(unobservable inputs).
Registration Document 2014
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