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E
Financial
E.4
Consolidated financial statements
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Presentation rules
Current and non-current assets and liabilities
borrowings, financial receivables and provisions represent the
Group’s working capital requirement.
realized, used or settled during the normal cycle of operations,
which can extend beyond 12 months following period-end. All
other assets and liabilities are classified as non-current. Current
assets and liabilities, excluding the current portion of
Assets and liabilities classified as current are expected to be
Assets and liabilities held for sale and discontinued
operations
transaction rather than through continuing use. This condition is
regarded as met only when the sale is highly probable and the
assets and liabilities are available for immediate sale in their
present condition.
previous periods. They are measured at the lower of their
carrying amount and fair value less costs to sell. Non-current
assets and liabilities are classified as held for sale if their
carrying amount will be recovered principally through a sale
lines in the Group’s balance sheet, without restatements for
Should there be assets and liabilities held for sale or
discontinued operations, they would be presented on separate
statement, and is restated in the cash flow statement and the
income statement.
business line or a business unit, the profit or loss from these
activities are presented on a separate line of the income
Should these assets and liabilities represent either a complete
Change in free cash flow and operatingmargin definition
margin” definitions by excluding equity based compensation
effects from the calculation of financial performance, in line with
sector practice.
The Group decided to change the “free cash flow” and “operating
based compensation and the amortization cost of equity based
compensation plans is excluded from the “operating margin” and
presented in “other operating income and expenses”.
As such, Group free cash flow excludes proceeds from equity
decreased by € 57 million.
This change in presentation has been applied retroactively to the
period presented and as a consequence of this reclassification,
the full year 2015 “operating margin” have been increased by
€ 33.3 million and the full year 2015 Group free cash flow
Translation of financial statements denominated in
foreign currencies
adjustments arising from a change in exchange rates are
recognized as a separate component of equity under “Translation
adjustments”.
The balance sheets of companies based outside the euro zone
are translated at closing exchange rates. Income statement
items are translated based on average exchange rates for the
period. Balance sheet and income statement translation
a foreign entity have been treated as assets and liabilities of that
foreign entity and translated into euro at the closing date.
Goodwill and fair value adjustments arising on the acquisition of
The Group does not consolidate any entity operating in a
hyperinflationary economy.
Translation of transactions denominated in foreign
currencies
financial instruments”.
statement under the heading “Other financial income and
expenses”, except where hedging accounting is applied as
explained in the paragraph “Financial assets – Derivative
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the income
Foreign currency transactions are translated into the functional
currency using the exchange rate prevailing at the dates of the
Business combination and goodwill
purchase of some of the net assets of another entity that
together form one or more businesses.
A business combination may involve the purchase of another
entity, the purchase of all the net assets of another entity or the
enable the Group to develop or significantly improve its
competitive position within a business or a geographical sector
are accounted for as business combinations.
Major services contracts involving staff and asset transfers that
newly acquired subsidiaries
Valuation of assets acquired and liabilities assumed of
issued by the Group in exchange for control of the acquiree.
to the former owners of the acquiree and the equity interests
is calculated as the sum of the acquisition-date fair values of the
assets transferred by the Group, liabilities incurred by the Group
Business combinations are accounted for according to the
acquisition method. The consideration transferred in exchange
for control of the acquired entity is measured at fair value, which
Direct transaction costs related to a business combination are
charged to the income statement when incurred.
measured either at fair value or based on their stake in the fair
value of the identifiable assets and liabilities of the acquired
entity. The choice of measurement basis is made on a
transaction-by-transaction basis.
Non-controlling interests may, on the acquisition date, be
contingent liabilities of the subsidiary acquired are measured at
their fair value.
During the first consolidation, all the assets, liabilities and
In step acquisitions, any equity interest held previously by the
Group is remeasured at fair value at the acquisition date (i.e. the
date when the Group obtains control) and the resulting gain or
loss is recognized in net income.
Purchase of non-controlling interests and sale of
interests in a controlled subsidiary
of control are recorded through shareholders’ equity (including
direct acquisition costs).
Purchase of non-controlling interests and sale transactions of
interests in a controlled subsidiary that do not change the status