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20.2 Notes to the consolidated financial statements for the year ended December 31, 2016
FINANCIAL INFORMATION CONCERNING ASSETS,
FINANCIAL POSITION AND FINANCIAL PERFORMANCE
20
Deferred tax liabilities are recorded for all taxable temporary differences of
subsidiaries, associates and partnerships, unless AREVA is in a position to control
the timing of reversal of the temporary differences and it is probable that such
reversal will not take place in the foreseeable future. Tax accounts are reviewed at
the end of each financial year, in particular to take into account changes in tax laws
and the likelihood that amounts recognized will be recovered.
Deferred taxes are recognized through profit and loss, unless they concern “other
items of comprehensive income”, i.e. changes in the value of available-for-sale
securities and derivatives considered as cash flow hedges, currency translation
adjustments on borrowings considered as hedges of net investments in foreign
operations, or actuarial gains and losses resulting from changes in assumptions
used to calculate post-employment employee benefits. Deferred taxes related to
these items are also recognized under “other items of comprehensive income”.
AREVA elected to recognize the value added business tax (
contribution sur la
valeur ajoutée des entreprises
, CVAE); as of 2010, all of its French subsidiaries
are subject to this tax on net income (including the tax for Chamber of Commerce
and Industry expenses) at the rate of 1.6%. AREVA considers that the base for
calculation of the CVAE is a net amount rather than a gross amount, since the value
added of its largest French subsidiaries represents a relatively small percentage of
their revenue, bringing the value added business tax into the scope of accounting
standard IAS 12, Income Taxes.
As provided in IAS 12, this election requires recognition of deferred taxes at the
rate of 1.6% on temporary differences for:
p
assets that produce economic benefits subject to the CVAE tax that cannot
be deducted from the value added. At January 1, 2010, the basis selected for
temporary differences consisted of the net carrying amount of property, plant
and equipment and intangible assets eligible for depreciation. Beginning in
2010, no deferred tax liability is recognized on asset acquisitions other than
business combinations, in application of the exemption provided by IAS 12 for
initial recognition of an asset or a liability;
p
asset impairments and provisions that may not be deducted from the CVAE but
that relate to expenses that will be deducted from the value added at a later date.
Since the CVAE tax is deductible for income tax purposes, deferred taxes are
recognized at the standard rate on deferred tax assets and liabilities recognized
for the CVAE, as described in the previous paragraph.
Deferred tax assets
The recoverable share of the AREVA group’s deferred tax assets is that for which
the probability of recovery is higher than 50%. To determine that probability, the
group performs a three-stage analysis: (a) demonstration of the non-recurrent nature
of the losses; (b) analysis of the outlook for future income; and (c) analysis of tax
management opportunities.
Regarding the outlook for future income, the probability of future taxable profits to
offset losses carried forward is assessed based on forecasts generated as part of
the budget process validated by management. The income outlook is determined
for a 10-year period for each entity and/or consolidated area, based on the initial
budget and income forecasts for the first 3 years; beyond that time, a standard year
derived from third-year data is used. The 10-year forecasting horizon selected is
consistent with the volume in group’s backlog, the operating period of the assets,
and the existence of certain framework agreements.
NOTE 2.
SCOPE OF CONSOLIDATION
2.1. CONSOLIDATED COMPANIES AND ASSOCIATES
(number of companies)
2016
2015
Consolidation method
Foreign
French
Foreign
French
Full consolidation
74
40
84
43
Equity method
18
8
17
8
Sub-total
92
48
101
51
TOTAL
140
152
Note 36 provides a list of the main consolidated companies and associates.
2.2. 2016 TRANSACTIONS
Sale of Canberra Inc., Canberra France and their subsidiaries
On July 1, 2016, AREVA sold Canberra, an AREVA subsidiary specialized in
radioactivity detection and measurement instrumentation, to the industrial group
Mirion Technologies, Inc.
Sale of Elta
On November 30, 2016, AREVA TA and AREVA SA sold their interests in Elta to
ECAGroup, a subsidiary of the Gorgé group. Elta is specialized in the development,
marketing and operational readiness of electronic equipment and systems for the
aerospace industry. This sale was done in connection with the implementation of
AREVA TA’s strategic plan aimed at refocusing its operations on the nuclear field.
198
2016 AREVA
REFERENCE DOCUMENT