Atari 2012 Annual Report Download - page 58

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ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
58
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 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
(measured at market value at balance sheet date) 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 PAYMENTS
The Group makes share-based payments to certain of its employees in the form of stock options or allocation of rights to
performance 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.
For the Fiscal Year 2011/2012, a 25% discount was taken into account when measuring the value of share grants during
the lock-up period.
2.18. MINORITY INTERESTS
Non-controlling interests must be presented in the consolidated statement of financial position within equity, separately
from the equity of the owners of the parent. Total comprehensive income must be attributed to the owners of the parent
and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
2.19. PROVISIONS
A provision is recognized when (i) the Group has a legal or constructive obligation toward a third party as a result of a
past event, (ii) the amount of the obligation can be reliably estimated, and (iii) it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, without at least an equivalent return expected from
the third party concerned. If the timing or amount of the obligation cannot be measured reliably, it is classified as a
contingent liability and is treated as an off-balance sheet commitment.
In the case of an obligation that is expected to be settled in more than one year, the amount of the provision is
discounted and the effect of such discounting is recorded as a financial expense.