Atari 2011 Annual Report Download - page 53

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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interest becomes permanently impaired, the impairment loss is recognized in the income statement for the period. The
Group determines whether an equity interest is permanently impaired by reference to its estimated value, which is
calculated on the basis of the Group’s share in the net assets of the entity concerned, the entity’s market capitalization or
profit outlook, adjusted to take into consideration the impact for the Group of its ownership of said interest in terms of
strategy and synergies with existing activities. Impairment losses cannot be reversed if the estimated value of the
securities increases in the future, in which case an unrealized gain is recognized in the above-mentioned separate
component of equity.
A list of the Group's main subsidiaries and associates is provided in Note 29, together with the respective consolidation
methods used.
2.3. INTRA-GROUP TRANSACTIONS
All material intra-group transactions, balances and unrealized gains and losses on transactions between Group
companies are eliminated in consolidation.
2.4. TRANSACTIONS IN FOREIGN CURRENCIES
Foreign currency transactions are initially translated into the Company’s functional currency using the exchange rates
prevailing at the date of the transactions. At the balance sheet date monetary assets and liabilities denominated in
foreign currencies are translated at the closing exchange rate. The resulting exchange differences are recognized in the
income statement, except for those relating to borrowings in foreign currencies that qualify as a hedge of a net
investment in a foreign operation. Such gains and losses are recognized in equity until the net investment is disposed of.
Exchange gains and losses arising from the translation of the Group’s net investments in foreign operations are
recognized directly in equity.
2.5. TRANSLATION OF FOREIGN SUBSIDIARIES’ FINANCIAL STATEMENTS
The functional currency of foreign subsidiaries is the local currency of the country in which they operate.
The assets and liabilities of foreign subsidiaries are translated using the closing exchange rate at the balance sheet date.
Their income statements are translated using the average exchange rate for the period. Any resulting exchange
differences are recognized in equity, under “Cumulative translation adjustments” for those attributable to the Group and
"Minority interests" for those attributable to third parties. These exchange differences have no impact on profit unless the
entity concerned is sold. The table below sets out the exchange rates for the main foreign currencies used by the Group:
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.