337
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 Rules and Methods
1.10
Foreign currency-denominated transactions
1.9
Employee benefit plans
Vivendi applied method 1 of Recommendation No. 2013-02 of the
National Accounting Council (
Autorité des Normes Comptables, ANC
,
dated November 7, 2013, consistent with the provisions of the former
Recommendation No. 2003-R.01 of the former council (
Conseil National
de la Comptabilité, CNC
).
The provision recorded for obligations in relation to employee benefit
plans includes all Vivendi employee benefit plans, i.e., retirement/
termination payments, pensions and supplemental pensions. It is
calculated as the difference between the value of the actuarial
obligations and that of plan assets, net of actuarial gains and losses
and unrecognized past service costs.
The actuarial obligation is calculated using the projected unit credit
method (each activity period generates additional entitlement).
Actuarial gains and losses are recognized using the «corridor method».
This consists of recording, in the profit or loss account for the relevant
period, the amortization calculated by dividing the portion of actuarial
gains and losses which exceeds the greater of 10% of (i) the obligation
or (ii) the fair value of the assets of the plans as of the beginning of
the fiscal year, by the average remaining working life expectancy of the
beneficiaries.
Foreign currency-denominated income and expense items are translated
using average monthly rates or, as applicable, using the exchange rate
negotiated during specific transactions.
Foreign currency-denominated receivables, payables, marketable
securities and cash balances are translated at the exchange rates
applicable on the accounting closing date (PCG Art. 342-5).
Unrealized gains and losses recognized on translation of foreign
currency borrowings, loans, receivables and payables, using exchange
rates prevailing on the accounting closing date, are recorded in the
Statement of Financial Position in Unrealized foreign exchange gains
and losses, except where currency hedging instruments that set the
currency rate at maturity have been implemented (please see Note 1.11,
“Derivative financial instruments” below).
In addition, Vivendi seeks to secure the exchange rate of assets and
long-term liabilities denominated in foreign currencies, particularly
through the implementation of derivative financial instruments. Foreign
exchange gains and losses realized on these hedging instruments are
reclassified as applicable in the Statement of Financial Position as
deferred revenue or expenses until the gain or loss on the hedged item
is recognized (please see Note 1.11, “Derivative financial instruments”
below).
A provision for foreign exchange losses is recorded in respect of
unhedged and unrealized exchange losses (PCG Art. 342-5).
Transactions in foreign currency that are covered by currency hedging
instruments that do not set the currency rate at maturity are provisioned
up to the amount of the uncovered risk.
Unrealized foreign exchange gains and/or losses on cash balances and
foreign currency current accounts (similar to cash balances under PCG
Art. 342-7) on the accounting closing date are recorded immediately as
foreign exchange gains and/or losses.
1.11
Derivative financial instruments
Vivendi uses derivative financial instruments to (i) reduce its exposure
to market risks associated with interest and foreign exchange rate
fluctuations, and (ii) secure the value of certain financial assets.
These instruments are traded over-the-counter with highly-rated
counterparties.
Pursuant to PCG Article 372, income and expenses generated by interest
rate and currency hedging instruments are recorded with the income
and expenses of the hedged item.
Loans, borrowings, receivables and payables covered by currency
hedging instruments that set the currency at maturity are recorded at
hedge rates and no foreign exchange difference is recognized.
Unrealized gains on derivative instruments that do not qualify for hedge
accounting are not recognized. Conversely, unrealized losses on these
instruments are recorded directly in earnings.
1.12
Individual training entitlement
Pursuant to Opinion 2004 F of the Emergency Committee of the French
National Accounting Council (CNC), Vivendi did not record a provision
for individual training entitlement as of year-end 2013.
The Company-wide agreement entered into in May 2006 provides for a
number of 20 training hours each year (up to a maximum of 120 hours)
for each employee. As of year-end 2013, a total of 20,226 training hours
remained unused.
