APC 2006 Annual Report Download - page 143

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29.4 - Information on standards
with little or no impact on the Group
accounts
29.4.1 - Consolidation
scope and methods
Application of the control criteria set out in IAS 27 –
Consolidated Financial Statements And Accounting
For Investments In Subsidiaries
– did not lead to any
change in the companies fully consolidated in the
Group accounts, except for consolidation of the special
purpose entity that holds the perpetual bonds,
described in note 2.
29.4.2 - Foreign currency translation
Cumulative translation differences were reset to zero
in the opening IFRS balance sheet at January 1, 2004,
as allowed under IFRS 1. The impact at January 1,
2004 was 211 million.
Adoption of IAS 21 and IAS 29 had no impact on the
Group accounts because the foreign currency conver-
sion and translation principles applied in the French
GAAP accounts (notes 1.4 and 1.5 to the 2004 French
GAAP consolidated financial statements) complied
fully with the methods prescribed under IFRS.
29.4.3 - Property, plant
and equipment and leases
Adoption of IAS 16 –
Property, Plant And Equipment
and IAS 40 – Investment Property had no impact on
the Group accounts.
Property, plant and equipment consist mainly of man-
ufacturing equipment dedicated to specific product
lines and material parts of individual items of equip-
ment were already depreciated separately in the
French GAAP accounts. Consequently, there was no
need to change the assets' carrying amount or depre-
ciation schedules to comply with IAS 16. In addition,
the Group does not own any investment property.
Adoption of IAS 17 –
Leases led to the reclassification
of certain non-material leases. The impact of these
reclassifications at January 1, 2004 was 6 million on
assets and 5 million on debt.
In accordance with IFRS 5 –
Non-Current Assets Held
For Sale And Discontinued Operations
– assets held
for sale at the year-end (consisting mainly of real
estate) were reported separately, in an amount of 15
million at January 1, 2004 and 8 million at December
31, 2004.
29.4.4 - Impairment of assets
As recommended by the French securities regulator
(COB, now renamed AMF), the Group elected for early
adoption – starting in 2002 – of standard CRC 2002-
10 concerning asset impairments. The method used to
test assets for impairment complies with IAS 36 –
Impairment Of Assets and the level (Cash Generating
Unit) at which the recoverability of goodwill is
assessed is also compatible with this standard.
The Group's business is highly sensitive to technolog-
ical advances and property, plant and equipment were
already tested for impairment at regular intervals.
For the purpose of preparing the IFRS accounts, IAS
36 was also applied to internally-generated intangible
assets corresponding to capitalized development
costs.
29.4.5 - Provisions
for losses and contingencies
The transition to IFRS had no impact on provisions for
losses and contingencies because the criteria applied
in the French GAAP accounts to recognize these items
complied with IAS 37 –
Provisions, Contingent Liabili-
ties and Contingent Assets.
However, in the IFRS accounts, long-term provisions
for contingencies were discounted. The discounting
adjustment amounted to 18 million at January 1,
2004 and 16 million at December 31, 2004.
The following reclassifications were made:
Certain provisions for impairment of assets that were
previously reported as liabilities were reclassified as a
deduction from the corresponding assets (29 million
at January 1, 2004 and 28 million at December 31,
2004).
Accrued liabilities related primarily to restructuring,
the environment and product warranties were reclassi-
fied under provisions for contingencies in the IFRS
financial statements at December 31, 2004, in an
amount of 237 million.