APC 2014 Annual Report Download - page 193

CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31,2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the measurement of the recoverable amount of non-current
l
negative goodwill is immediately recognized in the statement of
financial asset (note1.12 and note15); income.
the realizable value of inventories and work in process
l
Goodwill is not amortized, but tested for impairment at least
(note1.13); annually and whenever there is an indication that it may be
impaired (see note1.11 below). Any impairment losses are
the recoverable amount of accounts receivable (note1.14);
l
recognized under«Amortization and impairment of purchase
the valuation of share-based payments (note1.20);
l
accounting intangibles».
the calculation of provisions for contingencies, in particular for
l
1.7– Translation of the financial statements
warranties (note1.21);
the measurement of pension and other post-employment benefit
l
offoreign subsidiaries
obligations (note22).
1.5– Consolidation principles
The consolidated financial statements are prepared in euros.
The financial statements of subsidiaries that use another functional
currency are translated into euros as follows:
Subsidiaries, over which the Group exercises exclusive control,
either directly or indirectly, are fully consolidated. Exclusive control assets and liabilities are translated at the official closing rates;
l
is control by all means, including ownership of a majority voting income statement and cash flow items are translated at
l
interest, significant minority ownership, and contracts or weighted-average annual exchange rates.
agreements with other shareholders. Gains or losses on translation are recorded in consolidated equity
Group investments in entities controlled jointly with a limited under«Cumulative translation adjustments».
number of partners, such as joint ventures and alliances and
1.8– Foreign currency transactions
companies over which the Group has significant influence
(«associates») are accounted for by the equity consolidation
method. Significant influence is presumed to exist when more than Foreign currency transactions are recorded using the official
20% of voting rights are held by the Group. exchange rate in effect at the date the transaction is recorded or
Companies acquired or sold during the year are included in or the hedging rate. At the balance sheet date, foreign currency
removed from the consolidated financial statements as of the date payables and receivables are translated into the functional currency
when effective control is acquired or relinquished. at the closing rates or the hedging rate. Gains or losses on
translation of foreign currency transactions are recorded
Intra-group balances and transactions are eliminated. under«Net financial income/(loss)». Foreign currency hedging is
The list of consolidated subsidiaries and associates can be found described below, in note1.23.
in note32.
1.9– Intangible assets
The reporting date for all companies included in the scope of
consolidation is December31, with the exception of certain
associates accounted for by the equity method. For the latter
Intangible assets acquired separately or as part
however, financial statements up to September30 of the financial
5
year have been used (maximum difference of three months in line
ofabusiness combination
with the standards). Intangible assets acquired separately are initially recognized in the
1.6– Business combinations
balance sheet at historical cost. They are subsequently measured
using the cost model, in accordance with IAS38 – Intangible
Assets.
Business combinations are accounted for using the acquisition Intangible assets (mainly trademarks and customer lists) acquired
method, in accordance with IFRS3 – Business Combinations. In as part of business combinations are recognized in the balance
accordance with the option provided by IFRS1 – First-Time sheet at fair value at the combination date, appraised externally for
Adoption of IFRS– business combinations recorded before the most significant assets and internally for the rest, and that
January1, 2004 have not been restated. Material acquisition costs represents its historical cost in consolidation. The valuations are
are presented under«Other operating income and expenses»in performed using generally accepted methods, based on future
the statement of income. inflows. The assets are regularly tested for impairment.
All acquired assets, liabilities and contingent liabilities of the buyer Intangible assets are amortized on a straight-line basis over their
are recognized at their fair value at the acquisition date, the fair useful life or, alternatively, over the period of legal protection.
value can be adjusted during a measurement period that can last Amortized intangible assets are tested for impairment when there
for up to 12months from the date of acquisition. is any indication that their recoverable amount may be less than
The excess of the cost of acquisition over the Group’s share in the their carrying amount.
fair value of assets and liabilities at the date of acquisition is Amortization and impairment losses on intangible assets acquired
recognized in goodwill. Where the cost of acquisition is lower than in a business combination are presented on a separate statement
the fair value of the identified assets and liabilities acquired, the of income line item,«Amortization and impairment of purchase
accounting intangibles».
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