Saint Gobain - Registration document 2016

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9 FINANCIAL AND ACCOUNTING INFORMATION
3. Compagnie de Saint-Gobain annual financial statements (parent company)
266 SAINT-GOBAIN - REGISTRATION DOCUMENT 2016
The financial statements cover the twelve-month period from January 1 to December 31, 2016.
The following notes form an integral part of the annual financial statements.
These financial statements were approved by the Board of Directors on February 23, 2017.
ACCOUNTING PRINCIPLES AND METHODS NOTE 1
Accounts, French law, and accounting principles generally
accepted in France.
been drawn up in accordance with the French Chart of
The financial statements of Compagnie de Saint-Gobain have
The financial statements include the accounts of Compagnie
de Saint-Gobain’s German branch.
Intangible assets
over periods of three, five or ten years.
over 25 years. Other intangible assets, consisting of computer
software, are measured at acquisition cost and amortized
Purchased goodwill that is not legally protected is amortized
Property, plant and equipment
price plus incidental expenses), except for assets acquired
prior to December 31, 1976, which have been revalued.
Property, plant and equipment are stated at cost (purchase
commonly used useful lives are as follows:
They are depreciated over their estimated useful lives using
the straight-line or declining-balance method. The most
Buildings ‹ 40 to 50 years Straight-line
Improvements and additions ‹ 12 years Straight-line
Fixtures and fittings ‹ 5 to 12 years Straight-line
Office furniture ‹ 10 years Straight-line
Office equipment ‹ 5 years Straight-line
Vehicles ‹ 4 years Straight-line
Computer equipment ‹ 3 years Straight-line or
declining balance
Investments in subsidiaries and affiliates,
other investment securities
to determine the net present value of future cash flows,
excluding interest expense but after tax, based on business
assets and the proportion of consolidated net assets. Specific
impairment tests may be performed on a case-by-case basis
criteria, including the Company’s equity in the underlying net
then periodically measured at fair value, in particular when an
inventory is done. Fair value is estimated based on various
On initial recognition, investments in subsidiaries and affiliates
are stated at cost excluding any incidental expenses. They are
plans (or long-term budget projections).
capital gains and losses are not offset.
a provision is set aside for impairment. No unrealized capital
gain is recorded if fair value exceeds cost, and unrealized
When the fair value of the investments falls below their cost,
Receivables
aside for impairment when inventory value is less than book
value.
Receivables are stated at nominal value. A provision is set
Marketable securities
acquisition cost.
funds (OPCVM and FCP) and are stated at acquisition cost or
at market value at year end, if the latter is lower than the
Marketable securities mainly include units in money market
other than those classified as investment securities.
This item also includes treasury shares held by the company
These securities are valued in accordance with the first
in/first out (FIFO) method.
Foreign currency transactions
the euro exchange rate prevailing on the transaction date.
Receivables, payables and bank balances in foreign
Income and expenses in foreign currencies are recorded at
losses.” Provisions are booked for any exceptional unrealized
translation losses that are not hedged.
arising on translation are recorded under “Translation gains or
currencies are converted at the year-end exchange rate,
along with the related hedging instruments, and differences
Risk management/Financial instruments
the markets when the debt is renewed is spread over several
years.
proportion of overall debt. Similarly, the long-term debt
maturity schedule is set so that the financing raised through
the timely renewal of its financings at an optimal cost.
Long-term debt therefore systematically represents a high
Liquidity risk is managed with the main objective of ensuring
Currency, interest rate, and commodity (energy and raw
of fluctuations in the Saint-Gobain share price that could
affect the cost of performance unit plans.
on behalf of subsidiaries. In addition, on its own behalf and for
its subsidiaries, Compagnie de Saint-Gobain hedges the risk
materials) price risks resulting from the Group’s international
activities are hedged by Compagnie de Saint-Gobain, mainly
Currency risks are hedged mainly by fixed-term forward
purchase and sale contracts and currency options. Currency
sale contracts are recorded in the balance sheet at the
hedging rate.
receivables and payables hedged by forward purchase and
Only unrealized losses on currency options that do not qualify
(time) value is taken to income, and the portion that
represents the intrinsic value is recorded in the balance sheet.
The portion of the unrealized gain or loss on currency options
qualifying for hedge accounting that represents the extrinsic