Saint Gobain - Registration document 2016

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9 FINANCIAL AND ACCOUNTING INFORMATION
1. 2016 Consolidated Financial Statements
230 SAINT-GOBAIN - REGISTRATION DOCUMENT 2016
PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS NOTE 5
Goodwill 5.1
When an entity is acquired by the Group, its identifiable
retroactively at the acquisition date.
value within a twelve-month measurement period and
assets and assumed liabilities are recognized at their fair
All costs directly attributable to the acquisition, i.e., costs that
twelve-month period are recorded in the income statement.
adjustments to the acquisition price beyond this
twelve months following the acquisition. Under IFRS 3R, any
(“contingent consideration” in IFRS 3R), is determined in the
any earn-out payments or other deferred consideration
IFRS 3R), including, as appropriate, the estimated fair value of
The final acquisition price (“consideration transferred” in
professional fees paid to investment banks, attorneys,
the acquirer incurs to effect a business combination, such as
auditors, independent appraisers and other consultants, are
are no longer included in the cost of acquisition.
combination. They are therefore expensed as incurred and
no longer capitalized as part of the cost of the business
in equity without adjusting goodwill.
interest (without change of control) is recorded as a change
control is achieved. Any subsequent increase in ownership
In addition, goodwill is recognized only at the date that
under the full goodwill method is not therefore material.
goodwill method and the amount of goodwill calculated
the acquisition date. The Group generally applies the partial
amount of assets and liabilities acquired at their fair value at
assets acquired (partial goodwill method) - and (ii) the net
proportionate interest in the fair value of the net identifiable
Goodwill is recorded in the consolidated balance sheet as the
difference between (i) the acquisition-date fair value plus the
measured either at fair value (full goodwill method) or at the
amount of any minority interests in the acquisition -
the Group’s share of the assets and liabilities of the acquired
Any excess of the cost of an acquisition over the fair value of
net assets and liabilities acquired is recognized in the income
between the cost of the acquisition and the fair value of the
entity is recorded as goodwill. Any negative difference
statement during the year of acquisition.
Changes in goodwill in 2016 and 2015 are detailed below:
(in € millions) 2016 2015
At January 1
Gross value 12,180 11,899
Accumulated impairment (1,497) (1,437)
NET VALUE 10,683 10,462
Movements during the year
Impairment (13) (157)
Translation adjustments (189) 320
Changes in Packaging Sector 0 (1)
Changes in Group structure 188 59
TOTAL MOVEMENTS (14) 221
At December 31
Gross value 12,160 12,180
Accumulated impairment (1,491) (1,497)
NET VALUE 10,669 10,683
on the Interior Solutions business. Currency translation
2016 led to the recognition of goodwill impairment, primarily
€1 million (€115 million in 2015). Impairment tests performed in
2015), partially offset by companies deconsolidated for
consolidated companies for €189 million (€174 million in
In 2016, changes in Group structure related mainly to newly
differences arising in 2016 primarily reflect the impact of
fluctuations in the pound sterling, US dollar, and Brazilian real.
In 2015, changes in goodwill were primarily due to translation
Insulation business in Russia.
against the Flat Glass business in the United States and the
sterling and Brazilian real, and by impairment losses booked
adjustments arising on fluctuations in the US dollar, pound
December 31, 2016 and 2015 can be analyzed as follows:
The net value of goodwill by sector and by business at
(in € millions) 2016 2015
Flat Glass 240 209
High-Performance Materials 1,679 1,597
Construction Products 5,924 5,957
Building Distribution 2,826 2,920
TOTAL 10,669 10,683
December 31, 2016), and to the Building Distribution Sector,
December 31, 2016) and Industrial Mortars (€1,979 million at
Sector, and chiefly relates to Gypsum (€3,435 million at
Goodwill is essentially allocated to the Construction Products
primarily in the United Kingdom, France and Scandinavia.