Atari 2010 Annual Report Download - page 66

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
66
Euros Closing Average rate for
the year Closing Average rate for the year
USD 1.34790 1.41372 1.33080 1.42163
GBP 0.88980 0.88571 0.93080 0.83449
AUD 1.47410 1.66645 1.92160 1.81973
March 31, 2010 March 31, 2009
Goodwill and fair value adjustments resulting from the acquisition of a foreign entity are treated as components of that
entity and are therefore denominated in the entity’s functional currency. They are translated into euros at the closing
exchange rate at the balance sheet date.
2.6. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
A non-current asset, or a group of non-current assets and related liabilities (a disposal group), is classified as held for
sale when their carrying amount will be recovered principally through a sale transaction rather than through continuing
use. For this to be the case the asset must be available for immediate sale and the sale must be highly probable. Where
these assets or groups of assets are material they are recognized on a separate line of the balance sheet, under "Assets
held for sale". They are measured at the lower of their carrying amount and estimated sale price less costs to sell.
A discontinued operation is a component of an entity that has either been disposed of, or is classified as held for sale,
and:
• represents a separate major line of business or geographical area of operations for the Group;
• is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations; or
• is a subsidiary acquired exclusively with a view to resale.
Material income-statement and cash-flow items related to discontinued operations are accounted for separately in the
financial statements for all periods presented.
2.7. USE OF ESTIMATES
The preparation of consolidated financial statements in accordance with IFRS requires the Group to make certain
estimates and assumptions it considers reasonable and realistic. These estimates and assumptions have an impact on
the value of assets and liabilities, equity, profit and contingent assets and liabilities, as reported at the balance sheet
date.
The consolidated financial statements have therefore been prepared taking into account the current financial and
economic crisis and on the basis of market inputs at the balance sheet date. The immediate impacts of the crisis have
been taken into consideration, in particular as regards the measurement of assets such as inventories, trade receivables
and liabilities. Non-current assets such as intangible assets (notably goodwill and trademarks) have been measured on
the assumption that the crisis will be limited in time. The value of these assets has been assessed at each period end, on
the basis of the long-term economic outlook and on Group Management's best estimate in a context of reduced visibility
over future cash flows.
Estimates may be revised following any change in the circumstances on which they were based or when any new
information comes to light. Actual results may differ from the estimates and assumptions applied.
The main estimates and assumptions used to prepare the consolidated financial statements generally concern the
measurement of goodwill, intangible assets, deferred taxes and provisions for contingencies and losses, returns and
discounts and impairment of trade receivables.
Goodwill is tested annually for impairment, on March 31, or more frequently whenever there is an indication that it may
be impaired. The discounted future cash flow method that is used to determine the fair value of cash-generating units
requires a substantial degree of judgment as it is based on a certain number of factors, including estimates of future cash
flows relying on the assumption of business growth, discount rates and other variables.
2.8. GOODWILL
Goodwill arising on a business combination represents the excess of the cost of the acquisition over the fair value of the
identifiable assets, liabilities and contingent liabilities acquired. Provisional fair values are assigned at the time of the
acquisition and any adjustments to these fair values are recognized within twelve months of the acquisition date as a
retroactive restatement of goodwill. Beyond this twelve-month period adjustments are recognized directly in the income
statement.