Assystem - 2015 Registration Document

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FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

The Group carries out impairment tests at each year-end and whenever there is an indication of impairment in order to estimate the CGU’s recoverable amount. Recoverable amount corresponds to the higher of the CGU’s fair value less costs of disposal and its value in use (the present value of the future cash flows expected to be derived from the CGU). When the recoverable amount of a CGU is less than its carrying amount, an impairment loss is recognised and is deducted to the extent possible from the carrying amount of the goodwill allocated to the CGU. If a subsidiary is sold, the goodwill allocated to that subsidiary is taken into account in determining the proceeds of the sale. Goodwill arising on the acquisition of fully-consolidated companies is presented in a separate line of the financial statements. Goodwill related to equity-accounted investees is shown in “Equity-accounted investees”. Intangible assets In accordance with IAS 38, “Intangible Assets”, an intangible asset is recognised only if the cost of the asset can be measured reliably and it is probable that the expected future economic benefits attributable to the asset will flow to the Group. The Group’s intangible assets mainly correspond to software, which are non-current assets with a finite useful life. These assets are amortised on a straight-line basis over their useful lives, ranging between three and five years depending on the type of asset concerned: For internally-generated intangible assets, development costs are capitalised when they meet the recognition criteria in IAS 38, i.e. when the Group can demonstrate: ● the technical feasibility of completing the intangible asset so that the asset will be available for use or sale; ● its intention to complete the intangible asset and use or sell it; ● how the intangible asset will generate probable future economic benefits; ● the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; ● its ability to measure reliably the expenditure attributable to the intangible asset during its development. The cost of an internally-generated intangible asset comprises all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management. Selling, administrative and other general overhead expenditure are not components of the cost of an internally-generated intangible asset. Following initial recognition, these assets are amortised over their estimated useful lives. Intangible assets are measured at amortised cost (historical cost on initial recognition plus any amortisable costs recognised subsequently and less any accumulated amortisation and impairment losses). ● its ability to use or sell the intangible asset; ● management software: 5 years ● production software: 3 to 5 years ● office automation software: 1 to 3 years

At the date of a business combination, goodwill is measured as the excess of: ● the fair value of the consideration transferred, the amount of any non- controlling interests in the acquiree, and, for a business combination achieved in stages, the acquisition-date fair value of any equity interest previously held in the acquiree, over ● the acquisition-date fair value of the identifiable net assets acquired. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value (“full goodwill method”) or at the proportionate share of the acquiree’s identifiable net assets (“partial goodwill method”). The initial accounting for business combinations must be completed within one year of the acquisition date (the “measurement period”). During this measurement period, the Group retrospectively adjusts the provisional amounts recognised at the acquisition date to reflect any new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognised as of that date. Any gain on a bargain purchase (negative goodwill) is recognised in profit immediately. Subsequent to initial recognition, goodwill is carried at cost less any accumulated impairment losses (see the section entitled “Goodwill” below). Additionally, the following principles apply to business combinations: ● any contingent consideration is measured at fair value at the acquisition date, and any subsequent changes in the fair value of the contingent consideration are recognised in profit or loss; ● in accordance with IFRS 10, when the proportion of the equity in a subsidiary held by non-controlling interests changes, the Group recognises directly in “Equity attributable to owners of the parent” any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received. GOODWILL In accordance with IFRS 3R, goodwill is not amortised but is tested for impairment at least once a year. For the purpose of impairment testing, goodwill is allocated to cash- generating units (CGUs) or groups of CGUs. A CGU corresponds to the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The level of CGU used for the goodwill impairment tests depends on the characteristics of the business, market or geographic segment of each operation. ● acquisition-related costs are expensed as incurred;

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ASSYSTEM

FINANCIAL REPORT 2015