Atos - Registration Document 2016

E Financial E.4

Consolidated financial statements

revenues, costs, or the degree of progress toward completion, then revisions to the estimates are made. The Group performs ongoing profitability analyses of its services contracts in order to If circumstances arise that change the original estimates of through a provision for estimated losses on completion. determine whether the latest estimates of revenue, costs and profits, require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately Principal vs agent Revenue is reported net of supplier costs when the Group is acting as an agent between the client and the supplier. Factors adds meaningful value to the supplier’s product or service. obligor to the client, it assumes credit and delivery risks, or it generally considered to determine whether the Group is a principal or an agent, are most notably whether it is the primary an overall profit margin, and the contracts are performed concurrently or in a continuous sequence. interrelated that they are, in effect, part of a single project with recognized for the separate elements when these elements are separately identifiable. A group of contracts is combined and treated as a single contract when that group of contracts is negotiated as a single package and the contracts are so closely The Group may enter into multiple-element arrangements, which may include combinations of different services. Revenue is received from clients at the inception of a contract are recorded in “Other current liabilities” and spread as an increase in revenue over the term of the contract. Upfront payments to clients made at the inception of a contract are recorded in “Other current assets” and spread as a reduction of revenue over the length of the contract. Upfront payments and amortization expenses are recorded in “Operating expenses” in the consolidated income statement. be separately identified, costs can be deferred and expensed over the contract term if it can be demonstrated that there are recoverable. Capitalized transition costs are classified in “Trade accounts and notes receivable” in the consolidated balance sheet Transition costs are either expensed as incurred or recognized in revenue on a POC basis over the transition phase. In the rare event that services rendered during the transition phase cannot transition costs are impaired for an amount equal to the related forecast loss, before recognizing an additional provision for estimated losses on completion when necessary. In the event the contract turns out to be loss-making, capitalized Multiple-element arrangements Upfront payments Transition costs

Borrowings

issuance costs. Borrowings are subsequently stated at amortized costs. The calculation of the effective interest rate takes into account interest payments and the amortization of the debt issuance costs. Borrowings are recognized initially at fair value, net of debt Debt issuance costs are amortized in financial expenses over the life of the loan. The residual value of issuance costs for loans repaid in advance is expensed in the year of repayment. borrowings. Bank overdrafts are recorded in the current portion of purchase non-controlling interests are similar to a purchase of shares and are recorded in borrowings with an offsetting reduction of non-controlling interests. Firm or conditional commitments under certain conditions to purchase exceeds the amount of non-controlling interests, the Group chooses to recognize the balance in equity (attributable to owners of the parent). Any further change in the fair value of the For puts granted after January 1, 2010, when the cost of the non-controlling interests purchase commitment will also be recorded in equity (attributable to owners of the parent). Process Outsourcing (BPO) services. Depending on the structure of the contract, revenue is recognized according to the following principles: The Group provides Information Technology (IT) and Business Variable vs fixed price contracts Revenue based on variable IT work units is recognized as the services are rendered. Where the outcome of fixed price contracts can be estimated reliably, revenue is recognized using the price contract cannot be estimated reliably, contract revenue is recognized to the extent of contracts costs incurred that are likely to be recoverable. consolidated balance sheet under “Trade accounts and notes receivable” for services rendered in excess of billing, and billing exceeding services rendered is recorded as deferred income under “Other current liabilities”. Where the outcome of a fixed percentage-of-completion (POC) method. Under the POC method, revenue is recognized based on the costs incurred to date as a percentage of the total estimated costs to fulfil the contract. Revenue relating to these contracts is recorded in the Revenue with a long-term fixed price is recognized when services are rendered. Non-controlling interests purchase commitments Revenue Recognition

Operatingmargin

Comptabilité) recommendation n°2009-R-03 (issued on July 2 nd , 2009) regarding the presentation of financial statements. The underlying operating performance of ongoing activities is presented within operating margin, while unusual operating income/expenses are separately identified and presented below operating margin, in line with the CNC’s (Conseil National de la

Trusted partner for your Digital Journey

158