APC 2010 Annual Report Download - page 161

CONSOLIDATED FINANCIAL STATEMENTS
5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.2 - Reconciliation between the published
2009 statement of income and balance
sheet as of December31, 2009 and those
presented for comparative purposes
Treatment of acquisition costs
Following the fi rst time application in 2010 of IFRS3 (revised) (see
above), the acquisition costs incurred in 2009 on deals that it
was felt were highly likely to be concluded in 2010, capitalised in
2009 in accordance with IFRS3 applicable at the reporting date,
were restated under Other operating income and expenses for
EUR25.8million.
Presentation of the CVAE
As of the reporting date (see note30.3 to the 2009 consolidated
fi nancial statements), the Schneider Electric Group still hadn’t taken
a position regarding the press release by the CNC (France’s national
accounting board) on January14, 2010 concerning the accounting
treatment of the added value component (CVAE) of the CET levy
introduced in France by the 2010 Finance Act of December31,
2009.
Following an analysis of the implications for the Group and having
regard to its characteristics, the Group elected to classify as income
tax the CVAE added value component in order to be consistent with
the classifi cation as income tax of similar levies in Italy and Germany
(IRAP and Gewerbesteuer respectively). This decision is also based
on an IFRIC position from 2006, which notes that the term “taxable
profi t”implies a notion of a net rather than a gross amount, without
necessarily being the same as the accounting profi t.
Further to IAS12, the chosen option gave rise to the recognition
of deferred taxes at December31, 2009 at a rate of 1.5% on the
temporary differences comprised of:
•assets producing economic benefi ts that are subject to the
CVAE whereas consumption of their book value isn’t deductible
from the added value: it relates to the net book value as of
December31, 2009 of the property, plant and equipment subject
to depreciation and intangible assets subject to amortisation;
•asset impairment or provisions that are not deductible from the
CVAE but which relate to expenses that will be deductible from
added value at a later date.
As the CVAE is a deductible tax for income tax purposes, deferred
tax is recognised at the standard rate (34.43%) on the deferred
tax assets and liabilities recognised with respect to the CVAE as
described in the above section.
As it is a regulatory change, the deferred taxes recognised with
respect to the CVAE are offset in the statement of income. The impact
on the 2009 fi nancial statements represented an EUR11million tax
expense.
Published Acquisition costs CVAE Restated
Revenue 15,793 15,793
Gross profi t 6,221 6,221
Research & development (403) (403)
Selling, general and administrative expenses (3,770) (3,770)
Other operating income and expenses 88 (26) 62
EBITAR 2,136 (26) 2,110
Operating income 1,592 (26) 1,566
Net fi nancial income/loss (384) (384)
Profi t before tax 1,208 (26) 1,182
Income tax expense (293) 9 (11) (295)
Share of net income of associates (21) (21)
PROFIT FOR THE PERIOD 894 (17) (11) 866
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 159