Assystem - 2015 Registration Document

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

MAIN SOURCES OF ESTIMATION UNCERTAINTY

NOTE 4

Impairment of trade receivables An impairment loss is recognised on trade receivables if the present value of future amounts to be collected is less than their nominal value. The amount of the impairment loss recognised takes into account the age of the receivable and the debtor’s capacity to honour its obligations. A lower recoverability rate than estimated or a default by a major client could adversely affect future profit. Figures relating to impairment of trade receivables are presented in Note 14 – Trade receivables. Deferred taxes 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 and temporary differences can be utilised. In assessing whether it will have sufficient future taxable profit to recover deferred tax assets the Group takes into account forecasts of future taxable profits, non-recurring expenses included in past losses and which will not be incurred again in the future, and its past history of taxable profit for prior years. Figures for deferred taxes related to unused tax losses and temporary differences are presented in Note 24 – Deferred taxes. Goodwill impairment The estimates used in the assumptions for calculating goodwill impairment and the related sensitivity analyses are set out in Note 8 – Goodwill. Employee benefit obligations The estimates used in the assumptions for calculating employee benefit obligations and the related sensitivity analyses are set out in Note 21 – Employee benefit obligations. Derivative embedded in the Ornane bonds The derivative embedded in the Ornane bonds is measured using the Cox-Ross-Rubinstein model whose calculation assumptions are based on estimates.

The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that can affect the reported amounts of certain assets and liabilities and income and expenses. The impact of any changes in estimates is accounted for on a prospective basis. The estimates are made by Management based on the going concern principle using information available at the reporting date. They may change, however, due to circumstances or new information that could require a reconsideration of the context in which they were prepared. Actual results may therefore differ from the estimates. The random nature of certain estimates may make it difficult to ascertain the Group’s economic outlook, particularly in relation to asset impairment tests (see Note 8 – Goodwill). The accounting items that are the most exposed to the risk of estimation uncertainty are described below. Revenue recognition As described in Note 3 – Basis of preparation and summary of significant accounting policies, revenue is recognised at the fair value of the consideration received or receivable for the services rendered by the Group. Revenue generated from long-term service contracts is accounted for in accordance with IAS 11. The stage of completion of projects and revenue amounts are determined using numerous estimates based on cost-monitoring and past experience. Estimates and assumptions may be adjusted throughout the term of the contract and could have a significant impact on future profit. Provisions for expected losses on engineering contracts can be recognised in accordance with the percentage of completion method, in accordance with IAS 18 and IAS 11 (see the “Revenue recognition” section in Note 3 – Basis of preparation and summary of significant accounting policies). When it becomes probable that total contract costs will exceed total contract revenue a provision is immediately recognised for the related loss, after deducting any previously recognised losses. However, the loss actually recognised on completion of the contract may differ from the amounts originally provisioned, and may have an impact on future profit. Figures relating to provisions are presented in Note 20 – Provisions and contingent liabilities. Provisions for losses on completion of contracts and project warranty costs

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FINANCIAL REPORT 2015