Page 329 - 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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IV - VIVENDI SA 2012 STATUTORY FINANCIAL STATEMENTS
3. NOTES TO THE 2012 STATUTORY FINANCIAL STATEMENTS
Note 1 Accounting Rules and Methods
Note 1. Accounting Rules and Methods
1.1. GENERAL PRINCIPLES AND CHANGE IN ACCOUNTING METHODS
The statutory financial statements for the year ended December 31, 2012
have been prepared and presented in accordance with applicable French
laws and regulations.
The accounting rules and methods that were applied in the preparation of
these financial statements are identical to those applied in the preparation
of the 2011 statutory financial statements.
Vivendi’s Management makes certain estimates and assumptions that
it considers reasonable and realistic. Despite regular reviews of these
estimates and assumptions, based in particular on past or anticipated
achievements, facts and circumstances may lead to changes in these
estimates and assumptions, which may impact the amount of assets,
liabilities, equity or earnings recognized by the Company. In particular,
these estimates and assumptions relate to the measuring of asset
impairment (please refer to Note 7) and provisions (please refer to
Note 15) as well as to employee benefits (please refer to Note 1.9,
Employee benefit plans).
1.2. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
Intangible assets and property, plant and equipment are valued at
acquisition cost.
Depreciation and amortization are calculated using the straight-line
method and, where appropriate, the declining balance method over the
useful lives of the relevant assets.
1.3. LONG-TERM INVESTMENTS
Investments in affiliates and long-term portfolio securities
Investments in affiliates consist of investments in Vivendi Group affiliates
in which Vivendi holds a significant interest, in principle greater than 10%.
Long-term portfolio securities consist of securities held by Vivendi in
companies which are expected to generate a reasonable medium- and
long-term return, without involvement in their day-to-day management.
Investments in affiliates and long-term portfolio securities are valued at
acquisition cost, including any potential impact resulting from related
hedging transactions. If this value exceeds the value in use, an impairment
loss is recorded for the difference between the two.
Value in use is defined as the value of the future economic benefits
expected to derive from the use of an asset. This is generally calculated
by discounting the future cash flows, although a more suitable method
may be used where appropriate, such as market comparables, transaction
valuations, trading comparables for listed entities or proportionate share
of equity. The value in use of securities in foreign currencies is calculated
using the exchange rate applicable on the closing date for both listed
securities (French GAAP Plan Comptable Général, or PCG), Art. 342-3) and
unlisted securities.
Vivendi expenses investment and security acquisition costs in the period
during which they are incurred.
Loans to subsidiaries and affiliates
Loans to subsidiaries and affiliates consist of medium- and long-term loans
to Group companies. They do not include current account agreements with
Group subsidiaries that are used for the day-to-day management of cash
surpluses and shortfalls. A provision is, as applicable, recorded based on
the risk of non-recovery.
Treasury shares
All treasury shares held by Vivendi that are either (i) in process of
cancellation or (ii) acquired pursuant to the liquidity contract, are recorded
as Long-term Investments. Impairment losses are recorded on the latter
shares if their net book value is less than their stock market value, based
on the average share price during the month of December.
All remaining treasury shares held by Vivendi are recorded as Marketable
securities (please refer to ‘Marketable securities’ below).