Ubisoft 2014 Annual Report Download - page 115

Financial statements
2014
110
Any contingent consideration to be paid is recognized at fair value at the acquisition date. The
contingent consideration classified as equity is not remeasured and its settlement is recorded in
equity. However, for a consideration classified under liabilities, subsequent changes in the fair value of
the contingent consideration are recorded in profit or loss.
When rights to share-based payment (replacement award) shall be given in exchange for rights held
by employees of the acquired company (rights granted by the acquired company) and are attributable
to past service, then all or part of the amount of human replacement buyer is included in the
measurement of the transferred business combination. To assess this amount, the Group compares
the values based on the market, acquisition date, replacement awards and rights granted by the
acquired business and determining the proportion of services rendered to the date of the merger in
relation to services future remains to be returned.
Acquisitions completed between January 1, 2004, and January 1, 2010
For acquisitions completed between January 1, 2004, and January 1, 2010, goodwill represents the
excess of cost of acquisition over the Group’s share in the recognized amounts (usually at fair value)
for assets, liabilities and contingent liabilities.
When the difference is negative, a gain on the acquisition under favorable terms is recognized
immediately in income.
Costs related to the acquisition, other than those related to the issuance of debt or equity securities,
that the Group incurs due to a business combination are expensed as incurred.
If an entity is disposed of, related goodwill will be taken into account when determining the loss or gain
resulting from this sale.
Goodwill is therefore not amortized but is subject to impairment tests at least once a year. The
methods used to test loss in value are detailed in the note entitled “Impairment testing of non-current
assets.”
Brands
All brands are recognized at their fair value in accordance with IFRS 3 on business combinations or
IAS 38 on the acquisition of intangible assets.
Given Group brand development policy, most of the brands operated by the Group have an indefinite
life. This means that they are not amortized but are tested for impairment. The methods used to test
for impairment are described in the Note “Impairment testing of non-current assets.” However, in some
cases, the projections regarding the use of a brand may not be accurate enough in the medium and/or
long term. In this case, the brand in question is depreciated over the useful life expected by
management.
Other intangible assets
Other intangible assets include:
- Office software
- Information system costs
- Commercial software
- Engines
- External software developments
Accounting and subsequent measurement
Other intangible assets acquired by the Group are recognized at cost minus accumulated amortization
and impairment losses. In accordance with IAS 38 Intangible Assets, items are only recognized as
non-current assets where the cost can be determined reliably and it is likely that they will generate
future economic benefits.
No borrowing costs are included in the costs of property, plant and equipment.