Ubisoft 2012 Annual Report Download - page 97

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Financial Statements
2012
92
Bank overdrafts are included in cash and cash equivalents as they are an integral part of the
Company’s cash management. They are presented in liabilities, but are also offset against cash in the
cash flow statement.
Recognition and measurement of financial assets (excluding derivatives)
In accordance with IAS 39, “Financial Instruments: Recognition and Measurement”, financial assets
are broken down into four categories:
- Assets held to maturity (securities granting entitlement to fixed or determinable payments on
set dates, and which the Group is able and intending to hold to maturity);
- Loans and receivables (non-derivative financial assets subject to fixed or determinable
payments, and which are not listed on an active market);
- Assets held for trading (investments or securities bought and held primarily with a view to a
short-term resale);
- Available-for-sale assets (all financial assets not recognized in one of the three previous
categories).
Classification depends on the nature and objective of each financial asset, and is determined when
first recognized.
The Group has no financial assets classified as “held-to-maturity”.
Loans and advances (loans and receivables category)
They include security deposits.
When initially recognized, loans and advances are measured at fair value. These financial assets are
then recognized at amortized cost using the effective interest rate method. They are tested for
recoverable value, carried out whenever there are objective indicators (third party financial position)
that the recoverable value of these assets would be lower than the balance sheet value, and at least
on each balance sheet date.
Grants (loans and receivables category)
In some countries, video game production operations qualify for public grants.
These grants are presented as a reduction in research and development costs and a reduction of the
asset corresponding to the development of commercial software.
Any claims on the public body which awarded the grant are classified as loans and receivables as per
IAS 39.
Trade receivables (loans and receivables category)
Trade and other receivables linked to operating activity are recorded at fair value – in most cases the
same as nominal value – minus any loss of value recorded in a special impairment account. As
receivables are due in under a year, they are not discounted.
If there is any indication that these assets may be impaired, they will be subject to an analysis based
primarily on the following criteria: age of the receivable, third party’s financial position, negotiation of a
payment schedule, guarantees received, credit insurance.
The difference between the carrying amount and recoverable value is recorded as operating income.
Impairment may be reversed if the asset regains its value in the future. Reversals are booked in the
same item as provisions. Impairment is deemed permanent when the receivable itself is considered to
be permanently irrecoverable and written off.