Atari 2009 Annual Report Download - page 76

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
76
2.13. OTHER NON-CURRENT FINANCIAL AS SETS
This item consists of shares in non-consolidated entities, investments in associates, deposits and down-payments made
and loans.
The Group's interests in non-consolidated entities are recognized in accordance with the accounting principles described
in Note 2.2.
Treasury shares held by the parent company or fully consolidated subsidiaries are deducted from equity on the basis of
their purchase price or initial balance sheet value. Gains or losses on sales of treasury shares are eliminated in the
consolidated income statement and recorded in equity.
2.14. INVENTORIES
The value of inventories is calculated using the first-in, first-out method. The gross value of inventories corresponds to
their purchase price plus incidental expenses. Interest expense is not included in the value of inventories. A provision for
impairment is recorded to write down inventories to their net realizable value when their probable market value is less
than their cost. This write-down is recorded under "Cost of goods sold" in the income statement.
2.15. TRADE RECEIVABLES
Trade receivables are measured at their fair value, which generally corresponds to their nominal value.
Provisions for impairment are recognized for receivables that are considered doubtful, determined on the basis of the risk
of non-recovery.
As provided for in IAS 32 and 39, trade receivables assigned under securitization programs are not derecognized.
Consequently they are kept on the balance sheet under receivables with a corresponding liability recorded under short-
term debt when substantially all the risks and rewards inherent to the trade receivables are not transferred in substance
to the financing institutions.
2.16. CASH AND CASH EQUIVALENTS
In accordance with IAS 7, Statement of Cash Flows, cash and cash equivalents reported in the consolidated cash flow
statement respectively include (i) cash on hand and demand deposits and (ii) highly liquid short-term investments that
are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Investments with original maturities of more than three months and no possibility of early exit are excluded from cash and
cash equivalents.
2.17. SHARE-BASED PAYM ENTS
The Group makes share-based payments to certain of its employees in the form of stock options or grants of free shares.
Equity-settled share-based payment transactions are measured at fair value on the grant date (excluding the impact of
non market-related conditions). The recognized cumulative expense is based on (i) the fair value of the rights concerned,
determined at the grant date and (ii) the estimated number of shares that will ultimately be acquired (taking into account
the impact of non market-related acquisition conditions). This expense is recorded in current operating income over the
entire vesting period of the rights concerned, with a corresponding adjustment to equity.
As prescribed by IFRS 2, only options granted after November 7, 2002 and not fully vested as of January 1, 2005 are
measured and recognized as payroll expenses.
The fair value of stock options is calculated using the Black & Scholes model, which takes into account the exercise price
and period of the options, market conditions on the grant date (risk-free interest rate, share price, volatility, expected
dividends) and assumptions concerning the behavior of option holders.
No discount has been taken into account when measuring the value of share grants during the lock-up period, as this
discount would not have a material impact.
2.18. EMPLOYEE SAVINGS PL ANS (PEE)
When the Group carries out employee rights issues, an expense is recognized if the offer price of the shares is lower
than the market trading price.
The expense is calculated at the grant date, corresponding to the date on which the Group and its employees agree to
the terms and conditions of the offering.