APC 2007 Annual Report Download - page 161

6
Company financial statements at December 31, 2007
(All amounts in thousands of euros
unless otherwise specified)
Significant events of the year
In January 2007, Schneider Electric SA issued bonds
worth 110 million, due 2009.
On February 14, 2007, the Group finalized the acquisition
of American Power Conversion for $6.1 billion. A 1 billion
share issue was carried out in March 2007 to finance part
of this acquisition.
On July 6, 2007, the Company carried out a 209 million
employee share issue as part of the worldwide Employee
Stock Purchase Plan.
On October 8, 2007, Schneider Electric SA issued 600
million worth of fixed-rate bonds due January 2015 to refi-
nance the APC acquisition, while extending the average
maturity of its debt.
Accounting principles
The financial statements for the year ended December 31,
2007 have been prepared in accordance with French gen-
erally accepted accounting principles, as in 2006.
Non-current assets
Non-current assets are stated at cost.
Intangible assets
Intangible rights are amortized over a maximum of five
years.
Property, plant and equipment
Property, plant and equipment are depreciated by the
straight-line method over their estimated useful lives, rang-
ing from 3 to 10 years.
Equity investments
Shares in subsidiaries and affiliates are stated at cost.
Allowances for impairment in value are recorded if the car-
Dec. 31, 2006 Additions Disposals Dec. 31, 2007
Cost 5,183 3 (101) 5,085
Depreciation (683) (1) 43 (641)
Net 4,500 2 (58) 4,444
Note 1: Non-current assets
1a - Intangible assets
This item primarily comprises share issue and merger expenses, which are fully amortized.
1b - Property, plant and equipment
rying value is higher than the estimated value in use at the
end of the financial year. Value in use is estimated prima-
rily on the basis of underlying net assets, earnings outlook
and economic forecasts. For recently-acquired invest-
ments, account is also taken of the acquired business
goodwill.
For listed investments, value in use is also based on the
average stock price over the last month. Unrealized gains
on investments are not recognized.
Treasury stock
Treasury stock is stated at cost. The unit cost of treasury
stock removed from the portfolio is calculated according to
the average weighted cost method.
In the case of treasury stock held for allocation on the ex-
ercise of stock options, a provision is recorded if the exer-
cise price is lower than the carrying value of the related
treasury shares.
Pension obligations
The present value of pension obligations is determined
using the projected unit credit method.
Supplementary pension benefits are accrued for based on
the contractual terms of top-hat agreements.
The Company applies the corridor method to actuarial
gains and losses arising from changes in estimates. Under
this method, the portion of net cumulative actuarial gains
and losses that exceeds 10% of the projected benefit ob-
ligation is amortized over 10 years.
Currency risk
Unrealized exchange losses are reserved for when nec-
essary. Where unrealized exchange gains and losses exist
on investments and the related financing in the same cur-
rency and with the same maturity, the amount of the re-
serve is limited to the net loss.
Ordinary bonds
Call premiums and issue costs are amortized over the life
of the bonds.
159
3. Notes to the financial
statements of Schneider Electric SA