Supercuts 2010 Annual Report Download - page 171

PROVALLIANCE SAS
CONSOLIDATED FINANCIAL STATEMETS
DECEMBER 31, 2009 AND 2008
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(INFORMATION AS OF DECEMBER 31, 2009 AND FOR THE YEAR THEN ENDED NOT
COVERED BY AUDITORS' REPORT INCLUDED HEREIN)
1.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.1.6.4 Monitoring the recoverable amount of other assets
Other assets are allocated either to individual CGUs or groups of CGUs. Impairment losses recognized for these assets may be reversed
through profit under the line "Depreciation, amortization and impairment".
1.1.7 Financial assets
1.1.7.1 Investments in non-consolidated companies
In accordance with IAS 39, investments in non-consolidated companies are classified as available-for-sale financial assets and are
therefore carried at fair value. If their fair value cannot be determined reliably, the shares are recognized at cost. Where there is objective
evidence that the financial asset is impaired, an impairment loss is recognized in the income statement. Any such impairment is only reversed
through profit on disposal of the shares.
1.1.7.2 Other financial assets
Other financial assets correspond to guarantee deposits paid in connection with commercial leases required to operate the Group's salons.
The Group's financial assets do not include any derivative instruments.
1.1.8 Inventories
Inventories are stated at the lower of cost and net realizable value. Net realizable value corresponds to the estimated selling price in the
ordinary course of business, less the estimated costs necessary to make the sale.
Internal margins on inventories are eliminated in consolidation.
1.1.9 Revenue recognition—"Rendering of services"
In compliance with IAS 18, revenue generated from the rendering of services is recognized as the hairdressing services are performed and
the trademark franchise fees are received.
1.1.10 Deferred taxes
In accordance with IAS 12, deferred taxes are recognized, using the liability method, for temporary differences between the carrying
amounts of certain assets and liabilities and their tax base. They are calculated using tax rates that have been enacted or substantively enacted
by the end of the reporting period.
Deferred tax assets are recognized for the carryforward of unused tax losses to the extent that it is probable that future taxable profit will
be available against which the unused tax losses can be utilized.
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