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FINANCIAL STATEMENTS
6
CONSOLIDATED FINANCIAL STATEMENTS
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;
●
acquisition-related costs are expensed as incurred;
●
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.
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:
●
management software: 5 years
●
production software: 3 to 5 years
●
office automation software: 1 to 3 years
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;
●
its ability to use or sell the intangible asset;
●
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).
ASSYSTEM
FINANCIAL REPORT
2015
82