Ubisoft 2012 Annual Report Download - page 101

Financial Statements
2012
96
Licenses
The Group may issue licenses in return for a guaranteed minimum royalty. This royalty is recorded in
revenue when the significant rewards and risks attached to the goods have been transferred to the
buyer.
Additional revenue on sales above the guaranteed minimum royalty is recorded as and when the sales
are completed.
Services
Revenue corresponding to development and publishing services on behalf of third parties includes
royalties and other remuneration which are regarded as acquired and recognized in sales as and
when the service is rendered.
R&D costs
This item includes all research and development costs for production teams including salaries and
other compensation (retirement, payments based on equity instruments, etc.), operating costs, and
other significant research and development costs (royalties, depreciation on tools). This item includes
depreciation on commercial software.
Marketing costs
This item includes all sales and marketing costs, with the exception of editorial marketing costs which
are included under research and development costs.
Administrative and IT costs
This item includes all the expenses of the administrative and IT teams.
Current operating income and operating income
Operating income includes all revenues and costs directly linked to Group activities, whether these
revenues and costs are recurrent or resulting from one-off decisions or operations. Extraordinary
items, defined as revenues and expenses that are unusual in their frequency, nature and/or amount,
belong to operating income. Current operating income is equal to operating income before inclusion
of items whose amount and/or frequency are unpredictable by nature.
The Group believes that presenting the “current operating income” sub-total separately on the income
statement makes it easier to understand the recurrent operating performance and provides readers of
the financial statements with useful information in order to analyze this performance.
Financing costs and other financial income and expenses
The cost of net financial debt includes income and expenses linked to cash and cash equivalents,
interest expenses on borrowings which include the sale of investment securities, creditor interest and
the cost of ineffective currency hedging.
Other financial income and expenses include the sale of non-consolidated securities, capital gains or
losses on disposals and impairment of financial assets (other than trade receivables), income and
expenses linked to the discounting of assets and liabilities, and foreign exchange gains and losses on
unhedged items.
The impact on profit and loss of measuring financial instruments used in the management of foreign
exchange risks is recognized in operating income.