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Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 1. Accounting policies and valuation methods
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 calculated using 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 accounts receivable
Trade accounts receivable are initially recognized at fair value, which is
generally equal to their nominal value. Provisions for the impairment of
receivables are specifically valued in each business unit, generally using
a default percentage based on the unpaid amounts during one reference
period. For the group’s businesses which are based partly or fully on
subscription (Canal+ Group), 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.
1.3.6.
Assets held for sale and discontinued operations
A non-current asset or a group of assets and liabilities is held for
sale when its carrying value may be recovered principally through its
divestiture and not by its continued utilization. To meet this definition,
the asset must be available for immediate sale and the divestiture must
be highly probable. These assets and liabilities are recognized as assets
held for sale and liabilities associated with assets held for sale, without
offset. The related assets recorded as assets held for sale are valued
at the lowest value between the fair value (net of divestiture fees) and
the carrying value, or cost less accumulated depreciation and impairment
losses and are no longer depreciated.
An operation is qualified as discontinued when it represents a separate
major line of business and the criteria for classification as an asset held
for sale have been met or when Vivendi has sold the asset. Discontinued
operations are reported on a single line of the Statement of Earnings for
the periods reported, comprising the earnings after tax of discontinued
operations until divestiture and the gain or loss after tax on sale or
fair value measurement, less costs to divest the assets and liabilities
of the discontinued operations. In addition, cash flows generated by
discontinued operations are reported on a separate line of the Statement
of Consolidated Cash Flows for the relevant periods.
Accounting principles and valuation methods
specific to telecommunications activities, divested
in 2014 (SFR, Maroc Telecom group) or currently
in the process of being divested (GVT)
Revenues from operations and associated costs
Separable components of bundled offers
Revenues from telephone packages are recognized as multiple-
component sales in accordance with IAS 18. Revenues from the sale
of telecommunication equipment (mobile phones and other equipment),
net of discounts granted to customers through the distribution channel,
are recognized upon activation of the line. Revenues from telephone
subscriptions are recognized on a straight-line basis over the subscription
contract period. Revenues from incoming and outgoing traffic are
recognized when the service is rendered.
Customer acquisition and loyalty costs for mobile phones, principally
consisting of rebates on the sale of equipment to customers through
distributors, are recognized as a deduction from revenues. Customer
acquisition and loyalty costs consisting of premiums not related to the
sale of equipment as part of telephone packages and commissions paid
to distributors are recognized as selling and general expenses.
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