223
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 1. Accounting policies and valuation methods
Cash Flow From Operations (CFFO)
Vivendi considers cash flow from operations (CFFO), a non-GAAP
measure, to be a relevant measure to assess the group’s operating and
financial performance. The CFFO includes net cash provided by operating
activities, before income tax paid, as presented in the Statement of
Cash Flows, as well as dividends received from equity affiliates and
unconsolidated companies. It also includes capital expenditures, net
that relate to cash used for capital expenditures, net of proceeds from
sales of property, plant and equipment, and intangible assets.
The difference between CFFO and net cash provided by operating
activities, before income tax consists of dividends received from equity
affiliates and unconsolidated companies and capital expenditures,
net, which are included in net cash used for investing activities and of
income tax paid, net, which are excluded from CFFO.
1.2.4.
Consolidated Statement of Financial Position
Assets and liabilities that are expected to be realized, or intended
for sale or consumption, within the entity’s normal operating cycle
(generally 12 months), are recorded as current assets or liabilities. If
their maturity exceeds this period, they are recorded as non-current
assets or liabilities. Moreover, certain reclassifications have been made
to the 2012 and 2011 Consolidated Financial Statements to conform
to the presentation of the 2013 and 2012 Consolidated Financial
Statements.
1.3.
Principles governing the preparation of the Consolidated Financial Statements
Pursuant to IFRS principles, the Consolidated Financial Statements have
been prepared on a historical cost basis, with the exception of certain
assets and liabilities detailed below.
The Consolidated Financial Statements include the financial statements
of Vivendi and its subsidiaries after eliminating intragroup items and
transactions. Vivendi has a December 31 year-end. Subsidiaries that do
not have a December 31 year-end prepare interim financial statements
at that date, except when their year-end falls within the three months
prior to December 31.
Acquired subsidiaries are included in the Consolidated Financial
Statements of the group as of the date of acquisition.
1.3.1.
Use of estimates
The preparation of Consolidated Financial Statements in compliance
with IFRS requires the group management to make certain estimates
and assumptions that they consider reasonable and realistic. Even
though these estimates and assumptions are regularly reviewed
by Vivendi Management based, in particular, on past or anticipated
achievements, facts and circumstances may lead to changes in these
estimates and assumptions which could impact the reported amount of
group assets, liabilities, equity or earnings.
The main estimates and assumptions relate to the measurement of:
revenue: estimates of provisions for returns and price guarantees,
and rewards as part of loyalty programs deducted from certain
revenue items (please refer to Note 1.3.4);
provisions: risk estimates, performed on an individual basis, noting
that the occurrence of events during the course of procedures may
lead to a risk reassessment at any time (please refer to Notes 1.3.8
and 20);
employee benefits: assumptions are updated annually, such as
the probability of employees remaining within the group until
retirement, expected changes in future compensation, the discount
rate and inflation rate (please refer to Notes 1.3.8 and 21);
share-based compensation: assumptions are updated annually, such
as the estimated term, volatility and the estimated dividend yield
(please refer to Notes 1.3.10 and 22);
certain financial instruments: fair value estimates (please refer to
Notes 1.3.5.8, 1.3.7 and 24);
deferred taxes: estimates concerning the recognition of deferred tax
assets are updated annually with factors such as expected tax rates
and future tax results of the group (please refer to Notes 1.3.9 and 6);
goodwill and other intangible assets: valuation methods adopted
for the identification of intangible assets acquired through business
combinations (please refer to Notes 1.3.5.2 and 2);
goodwill, intangible assets with indefinite useful lives and assets in
progress: assumptions are updated annually relating to impairment
tests performed on each of the group’s cash-generating units (CGUs),
future cash flows and discount rates (please refer to Notes 1.3.5.7,
10, 12, and 13); and
UMG content assets: estimates of the future performance of
beneficiaries who were granted advances are recognized in the
Statement of Financial Position (please refer to Notes 1.3.5.3 and 11).
