230
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
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1.3.5.8. Financial assets
Financial assets consist of financial assets measured at fair value and
financial assets recognized at amortized cost. Financial assets are
initially recognized at the fair value corresponding, in general, to the
consideration paid, for which the best evidence is the acquisition cost
(including associated acquisition costs, if any).
Financial assets at fair value
Financial assets at fair value include available-for-sale securities,
derivative financial instruments with a positive value (please refer to
Note 1.3.7) and other financial assets measured at fair value through
profit or loss. Most of these financial assets are actively traded in
organized public markets, their fair value being calculated by reference
to the published market price at period end. For financial assets for
which there exists no published market price in an active market, fair
value is then estimated. As a last resort, the group values financial
assets at historical cost, less any impairment losses, when a reliable
estimate of fair value cannot be made using valuation techniques in the
absence of an active market.
Available-for-sale securities consist of unconsolidated interests and
other securities not qualifying for classification in the other financial
asset categories described below. Unrealized gains and losses on
available-for-sale securities are recognized in charges and income
directly recognized in equity until the financial asset is sold, collected
or removed from the Statement of Financial Position in another way,
or until there is objective evidence that the investment is impaired, at
which time the accumulated gain or loss previously reported in charges
and income directly recognized in equity is expensed in other financial
charges and income.
Other financial assets measured at fair value through profit or loss
mainly consist of assets held for trading which Vivendi intends to sell in
the near future (primarily marketable securities). Unrealized gains and
losses on these assets are recognized in other financial charges and
income.
Financial assets at amortized cost
Financial assets at amortized cost consist of loans and receivables
(primarily loans to affiliates and associates, current account advances
to equity affiliates and unconsolidated interests, cash deposits,
securitized loans and receivables, and other loans and receivables, and
debtors) and held-to-maturity investments (financial assets with fixed or
determinable payments and fixed maturity). At the end of each period,
these assets are measured at amortized cost using the effective interest
method. If there is objective evidence that an impairment loss has been
incurred, the amount of this loss, measured as the difference between
the financial asset’s carrying value and its recoverable amount (equal
to the present value of estimated future cash flows discounted at the
financial asset’s initial effective interest rate), is recognized in profit or
loss. Impairment losses may be reversed if the recoverable amount of
the asset subsequently increases in the future.
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1.3.5.9. Inventories
Inventories are valued at the lower of cost or net realizable value.
Cost comprises purchase costs, production costs and other supply and
packaging costs. They are usually computed at the weighted average
cost method. Net realizable value is the estimated selling price in the
normal course of business, less estimated completion costs and selling
costs.
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1.3.5.10. Trade account receivables
Trade accounts receivable are initially recognized at fair value, which
generally equals the nominal value. Provisions for impairment of
receivables are specifically evaluated in each business unit, generally
using a default percentage based on the unpaid amounts during one
reference period related to revenues for this same period. Thus, for
the group’s businesses which are based partly or fully on subscription
(Canal+ Group, GVT, and SFR), the depreciation rate of trade account
receivables is assessed on the basis of historical account receivables
from former customers, primarily on a statistical basis. In addition,
account receivables from customers subject to insolvency proceedings
or customers with whom Vivendi is involved in litigation or a dispute are
generally impaired in full.
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1.3.5.11. Cash and cash equivalents
The “cash and cash equivalents” category consists of cash in banks,
monetary UCITS, which satisfy AMF position No. 2011-13, and other
highly liquid investments with initial maturities of generally three
months or less. Investments in securities, investments with initial
maturities of more than three months without the possibility of early
termination and bank accounts subject to restrictions (blocked accounts),
other than restrictions due to regulations specific to a country or activity
sector (e.g., exchange controls), are not classified as cash equivalents
but as financial assets. Moreover, the historical performance of the
investments is monitored regularly to confirm their cash equivalents
accounting classification.
