Page 227 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
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III - CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Accounting policies and valuation methods
Music publishing
Revenues from the third-party use of copyrights on musical compositions
owned or administered by UMG are recognized when royalty statements
are received and collectability is assured.
Costs of revenues
Costs of revenues include manufacturing and distribution costs, royalty
and copyright expenses, artists’ costs, recording costs, and direct
overheads. Selling, general and administrative expenses primarily include
marketing and advertising expenses, selling costs, provisions for doubtful
receivables and indirect overheads.
1.3.4.3. SFR, MAROC TELECOM GROUP, AND GVT
Separable components of bundled offers
Revenues from telephone packages are recognized as multiple-
component sales in accordance with IAS 18. Revenues from the sale
of telecommunication equipment (mobile phones and other equipment),
net of discounts granted to customers through the distribution channel,
are recognized upon activation of the line. Revenues from telephone
subscriptions are recognized on a straight-line basis over the subscription
contract period. Revenues from incoming and outgoing traffic are
recognized when the service is rendered.
Customer acquisition and loyalty costs for mobile phones, principally
consisting of rebates on the sale of equipment to customers through
distributors, are recognized as a deduction from revenues. Customer
acquisition and loyalty costs consisting of premiums not related to the
sale of equipment as part of telephone packages and commissions paid to
distributors are recognized as selling and general expenses.
Equipment rentals
IFRIC 4 – Determining Whether an Arrangement Contains a Lease
applies to equipment for which a right of use is granted. Equipment lease
revenues are generally recognized on a straight-line basis over the life of
the lease agreement.
Content sales
Sales of services provided to customers managed by SFR and Maroc
Telecom Group on behalf of content providers (mainly premium rate
numbers) are either accounted for gross, or net of the content providers’
fees when the provider is responsible for the content and for setting the
price payable by subscribers.
Custom contracts
Service access and installation costs invoiced primarily to the operator’s
clients on the installation of services such as a broadband connection,
bandwidth service or IP connection are recognized over the expected
duration of the contractual relationship and the supply of the primary
service.
Access to telecommunication infrastructures is provided to clients
pursuant to various types of contracts: lease arrangements, hosting
contracts or Indefeasible Right of Use (IRU) agreements. IRU agreements,
which are specific to the telecommunication sector, confer an exclusive
and irrevocable right to use an asset (cables, fiber optic or bandwidth)
during a (generally lengthy) defined period without a transfer of ownership
of the asset. Revenue generated by leases, hosting contracts in the
Netcenters and IRU agreements is recognized over the duration of the
corresponding contract, except in the case of a finance lease whereby the
equipment is considered as a sale on credit.
In the case of IRU agreements and certain lease or service contracts,
services are paid in advance the first year. Where the contract is not
qualified as a finance lease, these non-refundable advance payments are
recorded as deferred income and recognized ratably over the contract
term. The deferral period is thus between 10 and 25 years for IRU
agreements and between 1 and 25 years for leases or service contracts.
Costs of revenues
Costs of revenues comprise purchasing costs (including purchases
of mobile phones), interconnection and access costs, network, and
equipment costs. Selling, general and administrative expenses notably
include commercial costs relating to marketing and customer care
expenses.
1.3.4.4. CANAL+ GROUP
Pay and free-to-air television
Revenues from television subscription services for terrestrial, satellite or
cable pay-television platforms are recognized over the service period, net
of gratuities granted. Revenues from advertising are recognized over the
period during which advertising commercials are broadcasted. Revenues
from ancillary services (such as interactive or video-on-demand services)
are recognized when the service is rendered. Subscriber management and
acquisition costs, as well as television distribution costs, are included in
selling, general and administrative expenses.
Equipment rentals
IFRIC 4 – Determining Whether an Arrangement Contains a Lease ,
applies to equipment for which a right of use is granted. Equipment lease
revenues are generally recognized on a straight-line basis over the life of
the lease agreement.