APC 2014 Annual Report Download - page 196

5CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31,2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.14– Trade and other operating receivables
Gains (losses) on the sale of own shares are added (deducted)
from consolidated reserves, net of tax.
Depreciations for doubtful accounts are recorded when it is
1.19– Pensions and other employee benefit
probable that receivables will not be collected and the amount of
the loss can be reasonably estimated. Doubtful accounts are
identified and the related depreciations determined based on
obligations
historical loss experience, the aging of the receivables and a Depending on local practices and laws, the Group’s subsidiaries
detailed assessment of the individual receivables along with the participate in pension, termination benefit and other long-term
related credit risks. Once it is known with certainty that a doubtful benefit plans. Benefits paid under these plans depend on factors
account will not be collected, the doubtful account and its related such as seniority, compensation levels and payments into
depreciation are written off through the Income Statement. mandatory retirement programs.
Accounts receivable are discounted in cases where they are due in
Defined contribution plans
over one year and the impact of adjustment is significant.
1.15– Assets held for sale
Payments made under defined contribution plans are recorded in
the income statement, in the year of payment, and are in full
settlement of the Group’s liability. As the Group is not committed
Assets held for sale are no longer amortized or depreciated and beyond these contributions, no provision related to these plans has
are recorded separately in the balance sheet under«Assets held been booked.
for sale»at the lowest of its amortized cost or net realizable value.
In most countries, the Group participates in mandatory general
1.16– Deferred taxes
plans, which are accounted for as defined contribution plans.
Deferred taxes, related to temporary differences between the tax
Defined benefit plans
basis and accounting basis of consolidated assets and liabilities,
are recorded using the balance sheet liability method. Deferred tax Defined benefit plans are measured using the projected unit
assets are recognized when it is probable that they will be creditmethod.
recovered at a reasonably determinable date. Expenses recognized in the statement of income are split between
Future tax benefits arising from the utilization of tax loss carry operating income (for service costs rendered during the period)
forwards (including amounts available for carry forward without and net financial income/(loss) (for financial costs and expected
time limit) are recognized only when they can reasonably be return on plan assets).
expected to berealized. The amount recognized in the balance sheet corresponds to the
Deferred tax assets and liabilities are not discounted. Deferred tax present value of the obligation, and net of plan assets.
assets and liabilities related to the same unit and which are When this is an asset, the recognized asset is limited to the
expected to reverse in the same period of time are netted off. present value of any economic benefit due in the form of plan
1.17– Cash and cash equivalents
refunds or reductions in future plan contributions.
Changes resulting from periodic adjustments to actuarial
assumptions regarding general financial and business conditions or
Cash and cash equivalents presented in the balance sheet consist demographics (i.e., changes in the discount rate, annual salary
of cash, bank accounts, term deposits of three months or less and increases, return on plan assets, years of service,etc.) as well as
marketable securities traded on organized markets. Marketable experience adjustments are immediately recognized in the balance
securities are short-term, highly-liquid investments that are readily sheet as a separate component of equity in«Other reserves»and
convertible to known amounts of cash at maturity. They notably in comprehensive income as other comprehensive income/loss.
consist of commercial paper, mutual funds and equivalents. In light
of their nature and maturities, these instruments represent
Other commitments
insignificant risk of changes in value and are treated as cash
equivalents. Provisions are funded and expenses recognized to cover the cost
1.18– Schneider Electric SE shares
of providing health-care benefits for certain Group retirees in
Europe and the United States. The accounting policies applied to
these plans are similar to those used to account for defined benefit
pension plans.
Schneider Electric SE shares held by the parent company or by
fully consolidated companies are measured at acquisition cost and The Group also funds provisions for all its subsidiaries to cover
deducted from equity. They are held at their acquisition cost until seniority-related benefits (primarily long service awards for its
sold. French subsidiaries). Actuarial gains and losses on these benefit
obligations are fully recognized in profit or loss.
194 2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC