Assystem - 2015 Registration Document

6

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Deferred taxes Deferred taxes are recognised using the liability method for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax liabilities are recognised for all taxable temporary differences, apart from in the exceptional cases referred to in IAS 12. Deferred tax assets are recognised for the carryforward of unused tax losses and unused tax credits and deductible temporary differences only to the extent that it is probable that the Group will have sufficient future taxable profit against which the unused tax losses, tax credits or temporary differences can be utilised. The following elements are taken into account when estimating whether the Group will have sufficient future taxable profit to recover deferred tax assets: A deferred tax liability is recognised for taxable temporary differences relating to equity-accounted investees even if it is probable that there will be undistributed profits (as the Group does not control the investee it cannot determine its profit distribution policy), unless there is an agreement requiring that that the profits of the equity-accounted investee will not be distributed in the foreseeable future. When a deferred tax asset or liability relates to an item that is recognised directly in equity, then the related deferred tax is also recognised directly in equity. Deferred tax assets and liabilities are offset only when the Group has a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority. Deferred tax assets and liabilities are not discounted. Stock options – Share-based payment In accordance with IFRS 2, “Share-based Payment”, when the Group receives services from employees as consideration for share-based payments the fair value of the employee services received in exchange for the grant of the share-based payments is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the benefits granted to the employees concerned under stock option plans or free share/performance share plans. The expense is recognised on a straight-line basis over the vesting period. For stock options, the fair value of the options is determined using the Black & Scholes pricing model. Although the share-based payment expense – which is recognised as a non-recurring expense in the consolidated income statement – reduces profit for the period, it has no impact on total equity. ● forecasts of future taxable profits; ● non-recurring expenses included in past losses and which will not be incurred again in the future; ● past history of taxable profit for prior years.

DEFINED CONTRIBUTION PLANS Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all of the benefits relating to the services rendered by employees prior to retirement. The actuarial risk (that benefits will cost more than expected) and the investment risk (that plan assets will be insufficient to meet expected benefits) is not borne by the employer entity. Contributions to government plans and other defined contribution plans are recognised as an expense for the period in which they are due. No provision is recorded as the Group’s obligation is limited to its contributions to the plans. DEFINED BENEFIT PLANS All post-employment benefit plans other than defined contribution plans correspond to defined benefit plans. Under defined benefit plans the entity’s obligation is to provide the agreed benefits to current and former employees. The employer entity may either: ● pay contributions to a separate entity (a fund), but must pay further contributions (or pay unfunded benefits) if the fund does not hold sufficient assets to pay all of the benefits relating to the services rendered by employees; or ● pay the benefits itself, funding them out of its own assets. Consequently, under defined benefit plans the employer entity bears both the actuarial risk and the investment risk. In accordance with IAS 19, “Employee Benefits”, actuarial valuations of post-employment benefit obligations under defined benefit plans are made using the projected unit credit method, based on assumptions for mortality rates, staff turnover and future salary projections. The net defined benefit liability recognised at the reporting date corresponds to the present value of the defined benefit obligation – i.e. the present value of expected future payments required to settle the obligation resulting from employee service in the current and prior periods – less the fair value of plan assets. Actuarial gains and losses are recognised in other comprehensive income.

86

ASSYSTEM

FINANCIAL REPORT 2015