Page 330 - 2012 Annual Report

330 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
1.4. OPERATING RECEIVABLES
Treasury shares
Treasury shares purchased either for sale to Group employees upon
exercise of stock purchase options or for allotment to employees as
performance shares, are recorded as Marketable securities.
At year-end, the shares allocated to specific plans are not depreciated
but are subject to a provision (please see ‘Provisions’ below). For those
shares not allocated to specific plans, an impairment loss is recognized,
as applicable to reduce their net value down to their stock market value
based on of the average share price during the month of closing.
Other marketable securities
All other marketable securities are recorded at acquisition cost. A
provision is recorded if the estimated trading value at the end of the
period is less than the acquisition cost. The value in use of securities in
foreign currencies is calculated using the exchange rates applicable on
the closing date.
1.6. DEFERRED CHARGES RELATING TO FINANCIAL INSTRUMENTS
Issue costs in relation to bonds and lines of credit are amortized equally
over the term of such instruments.
1.7. PROVISIONS
A provision is recorded where Vivendi has an obligation to a third party
and it is probable or certain that an outflow of resources will be necessary
to settle this obligation, without receipt of an equivalent consideration
from the third party.
The provision is equal to the best estimate, taken at period-end, of the
outflow of resources necessary to settle the obligation, where the risk
exists at the end of the period.
The assumptions underlying the provisions are regularly reviewed and any
necessary adjustments are recorded.
Where it is not possible to provide a reliable estimate for the amount of
the obligation, a provision is not recorded and disclosure is made in the
notes to the financial statements (please refer to Note 24, Litigation).
1.8. STOCK OPTION PLANS AND PERFORMANCE SHARE PLANS
When the Company grants performance shares or establishes a stock
purchase option plan that is settled by the delivery of treasury shares, a
provision is recognized. This provision is calculated based on the market
price of Vivendi shares at grant date or the estimated share purchase price
at year-end. In the case of stock purchase option plans, the entry cost or
estimated share purchase price is reduced by the exercise price that is
likely to be paid by employees. Pursuant to the PCG, expenses, charges
and reversals in relation to the grant of stock options and performance
shares to company employees, are recorded as personnel costs.
Operating receivables are recorded at nominal value. A provision is,
as applicable, recorded based on the risk of non-recovery.
1.5. MARKETABLE SECURITIES