APC 2013 Annual Report Download - page 196

5CONSOLIDATED FINANCIALSTATEMENTS ATDECEMBER 31, 2013
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Trade and other operating receivables1.14 – Pensions and other employee benefit 1.19 –
obligations
Depreciations for doubtful accounts are recorded when it is
probable that receivables will not be collected and the amount of Depending on local practices and laws, the Group’s subsidiaries
the loss can be reasonably estimated. Doubtful accounts are participate in pension, termination benefit and other long-term
identified and the related depreciations determined based on benefit plans. Benefits paid under these plans depend on factors
historical loss experience, the aging of the receivables and a such as seniority, compensation levels and payments into
detailed assessment of the individual receivables along with the mandatory retirement programs.
related credit risks. Once it is known with certainty that a
Defined contribution plans
doubtful account will not be collected, the doubtful account and
its related depreciation are written off through the Income Payments made under defined contribution plans are recorded in
Statement. the income statement, in the year of payment, and are in full
Accounts receivable are discounted in cases where they are due settlement of the Group’s liability. As the Group is not committed
in over one year and the impact of adjustment is significant. beyond these contributions, no provision related to these plans
Assets held for sale1.15 –
has been booked.
In most countries, the Group participates in mandatory general
plans, which are accounted for as defined contribution plans.
Assets held for sale are no longer amortized or depreciated and
Defined benefit plans
are recorded separately in the balance sheet under “Assets held
for sale” at the lowest of its amortized cost or net realizable Defined benefit plans are measured using the projected unit
value. creditmethod.
Deferred taxes1.16 – Expenses recognized in the statement of income are split
between operating income (for service costs rendered during the
period) and net financial income/(loss) (for financial costs and
Deferred taxes, related to temporary differences between the tax expected return on plan assets).
basis and accounting basis of consolidated assets and liabilities,
are recorded using the balance sheet liability method. Deferred The amount recognized in the balance sheet corresponds to the
tax assets are recognized when it is probable that they will be present value of the obligation, and net of plan assets.
recovered at a reasonably determinable date. When this is an asset, the recognized asset is limited to the
Future tax benefits arising from the utilization of tax loss carry present value of any economic benefit due in the form of plan
forwards (including amounts available for carry forward without refunds or reductions in future plan contributions.
time limit) are recognized only when they can reasonably be Changes resulting from periodic adjustments to actuarial
expected to berealized. assumptions regarding general financial and business conditions
Deferred tax assets and liabilities are not discounted. Deferred or demographics (i.e., changes in the discount rate, annual salary
tax assets and liabilities related to the same unit and which are increases, return on plan assets, years of service,etc.) as well as
expected to reverse in the same period of time are netted off. experience adjustments are immediately recognized in the
balance sheet as a separate component of equity in “Other
Cash and cash equivalents1.17 – reserves” and in comprehensive income as other comprehensive
income/loss.
Other commitments
Cash and cash equivalents presented in the balance sheet
consist of cash, bank accounts, term deposits of three months
or less and marketable securities traded on organized markets. Provisions are funded and expenses recognized to cover the
Marketable securities are short-term, highly-liquid investments cost of providing health-care benefits for certain Group retirees in
that are readily convertible to known amounts of cash at Europe and the United States. The accounting policies applied to
maturity. They notably consist of commercial paper, mutual these plans are similar to those used to account for defined
funds and equivalents. In light of their nature and maturities, benefit pension plans.
these instruments represent insignificant risk of changes in value The Group also funds provisions for all its subsidiaries to cover
and are treated as cash equivalents. seniority-related benefits (primarily long service awards for its
Schneider ElectricSA shares1.18 –
French subsidiaries). Actuarial gains and losses on these benefit
obligations are fully recognized in profit or loss.
Schneider ElectricSA shares held by the parent company or by
fully consolidated companies are measured at acquisition cost
and deducted from equity. They are held at their acquisition cost
until sold.
Gains (losses) on the sale of own shares are added (deducted)
from consolidated reserves, net of tax.
194 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC