175 / 330
FINANCIAL INFORMATION
4.2 Consolidated financial statements
4
175
Registration Document 2016 — Capgemini
Consolidation principles and Group structure
Note 2
Consolidation methods
The accounts of companies directly or indirectly controlled by
the parent company are fully consolidated. The parent company
is deemed to exercise control over an entity when it has the
power to govern the financial and operating policies of the entity
so as to obtain benefits from its activities.
Group’s share in profit for the year of the associate in the
Income Statement. The Group’s share in net assets of the
associate is recorded under “Other non-current assets” in the
Consolidated Statement of Financial Position.
company directly or indirectly exercises significant influence,
without however exercising full or joint control, are accounted
for by the equity method. This method consists of recording the
Investments in associates over whose management the parent
Details of the scope of consolidation are provided in Note 32,
List of the main consolidated companies by country.
adopted by the Group.
All consolidated companies prepared their accounts to
December 31, 2016 in accordance with the accounting policies
well as inter-company profits.
Inter-company transactions are eliminated on consolidation, as
The Group does not control any special purpose entities that
have not been consolidated.
Foreign currency translation
The consolidated accounts presented in these consolidated
financial statements have been prepared in euros.
the Income Statement.
year. However, for certain material transactions, it may be
relevant to use a specific rate of exchange. Differences arising
from translation at these different rates are recognized directly
in equity under “Translation reserves” and have no impact on
Income statements denominated in foreign currencies are
translated into euros at the average rates of exchange for the
equity accounts, which are carried at their historical values.
The Consolidated Statements of Financial Position of
subsidiaries denominated in foreign currencies are translated
into euros at year-end rates of exchange with the exception of
Exchange differences arising on monetary items which form an
integral part of the net investment in foreign subsidiaries are
recognized in equity under “Translation reserves”.
on the type of transaction concerned.
Exchange differences on receivables and payables
denominated in a foreign currency are recorded in operating
income or expense or financial income or expense, depending
The exchange rates used to translate the financial statements of the Group’s main subsidiaries into euros are as follows:
Average rate
Closing rate
2015
2016
2015
2016
Australian dollar
0.67838
0.67230
0.67128
0.68512
Brazilian real
0.27480
0.26057
0.23193
0.29150
Canadian dollar
0.70630
0.68234
0.66155
0.70482
Chinese renminbi yuan
0.14349
0.13609
0.14163
0.13661
Indian rupee
0.01406
0.01345
0.01389
0.01397
Norwegian krona
0.11200
0.10765
0.10413
0.11006
Polish zloty
0.23916
0.22920
0.23453
0.22674
Pound sterling
1.37806
1.22455
1.36249
1.16798
Swedish krona
0.10691
0.10567
0.10882
0.10469
US dollar
0.90166
0.90404
0.91853
0.94868
2015.
N.B. the income statement of IGATE, purchased on July 1, 2015, was consolidated at average exchange rates for the second-half of
Business combinations
Business combinations are accounted for using the
acquisition method. Under this method, the identifiable
assets acquired and liabilities assumed are recognized at fair
value at the acquisition date and may be adjusted during the
12 months following this date.
Exchange gains and losses on inter-company
transactions
transactions. However, a foreign exchange gain or loss
arising on an inter-company monetary asset or liability (
e.g.
an inter-company receivable denominated in a currency
different from the functional currency of the subsidiary)
The results and financial position of a foreign subsidiary are
included in the Group’s consolidated financial statements
after the elimination of inter-company balances and
operation (
e.g.
a loan with no fixed maturity).
cannot be eliminated. Such foreign exchange gains and
losses are recognized in the Income statement or in Income
and expense recognized directly in equity, if the underlying
forms an integral part of the net investment in the foreign
the centralized management of currency risk in the parent
company are eliminated.
inter-company operating transactions performed as part of
The fair values of hedging instruments relating to