SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017
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Financial and accounting information 2017 Consolidated financial statements
In 2017 Saint-Gobain also selected the software it would use in this respect. Training sessions and data preparation workshops were organized, helping to guarantee a smooth transition to IFRS 16 at January 1, 2019. Amendments to IFRS 4, “Applying IFRS 9 with IFRS 4”.
other factors seen in the prevailing economic and financial environment, which makes it difficult to predict future business performance. Actual amounts may differ from those obtained through the use of these estimates and assumptions. The main estimates and assumptions described in these notes concern the measurement of employee benefit obligations and share-based payment (Note 4 "Employees, personnel expenses and employee benefit obligations"), asset impairment tests (Note 5 “Intangible assets and property, plant and equipment”), provisions for other liabilities and charges (Note 7 “Other current and non-current liabilities and provisions, contingent liabilities and litigation”), the measurement of financial instruments (Note 8 “Financing and financial instruments”), and taxes (Note 10 “Taxes”). a step acquisition (an acquisition in stages), as follows: (i) as a disposal of the previously-held interest, with recognition of any resulting gain or loss in the consolidated financial statements, and (ii) as an acquisition of all of the shares, with recognition of the corresponding goodwill on the entire interest (previous and new acquisitions). When the Group disposes of a portion of an equity interest leading to the loss of control (but retains a minority interest), the transaction is also treated as both a disposal and an acquisition, as follows: (i) as a disposal of the entire interest, with recognition of any resulting gain or loss in the consolidated financial statements, and (ii) as an acquisition of a minority interest, measured at fair value. Potential voting rights and share purchase b) commitments Potential voting rights conferred by call options on minority interests are taken into account in determining whether the Group exclusively controls an entity only when the Group has control. When calculating its percentage interest in controlled companies, the Group considers the impact of cross put and call options on minority interests in the companies concerned. This approach gives rise to the recognition in the financial statements of an investment-related liability, included within other provisions and non-current liabilities, corresponding to the present value of the estimated exercise price of the put option, with a corresponding reduction in minority interests and equity attributable to equity holders of the parent. Any subsequent changes in the fair value of the liability are recognized by adjusting equity. Minority interests c) Under IFRS 10, minority interests (referred to as “non-controlling interests” in IFRS 3R) are considered as a shareholder category (single economic entity approach). As a result, changes in minority interests with no loss of control continue to be recorded in the statement of changes in equity and have no impact on the income statement or balance sheet, except for changes in cash and cash equivalents.
Estimates and assumptions 1.2.
The preparation of consolidated financial statements in compliance with IFRS requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported in the balance sheet and the disclosure of contingent assets and liabilities in the notes to the financial statements, as well as the reported amounts of income and expenses during the period. These estimates and assumptions are based on past experience and on various
NOTE 2
SCOPE OF CONSOLIDATION
Accounting principles related 2.1. to consolidation
The Group’s consolidated financial statements include the accounts of Compagnie de Saint-Gobain and of all companies controlled by the Group, as well as those of jointly controlled companies and companies over which the Group exercises significant influence. Consolidation methods 2.1.1. Full consolidation a) Companies over which the Group exercises exclusive control, either directly or indirectly, are fully consolidated. Joint arrangements b) Joint arrangements that meet the definition of joint ventures are accounted for by the equity method. Balance sheet and income statement items relating to joint arrangements that meet the definition of joint operations are consolidated line-by-line based on the amount actually contributed by the Group. Equity accounting c) Companies over which the Group directly or indirectly exercises significant influence are accounted for by the equity method. The Group’s share of the income of equity-accounted companies is shown on two separate lines of the income statement. The income of equity-accounted companies whose main business activity is in keeping with the Group’s core operational business is presented in business income under “Share in net income of core business equity-accounted companies” while the income of other equity-accounted companies is shown under “Share in net income of non-core business equity-accounted companies” in pre-tax income. Business combinations 2.1.2. Step acquisitions and partial disposals a) When the Group acquires control of an entity in which it already holds an equity interest, the transaction is treated as
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