Atari 2012 Annual Report Download - page 94

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
94
current balance, and
 Operating cash flows for the Fiscal Year 2012/2013 in line with the Business plan.
Group management believes that its projections are reasonable. However, in light of the uncertainties inherent in
financial negotiations and strategic refocusing under adverse economic circumstances, results may differ from forecasts.
Those circumstances could restrict the Group’s ability to finance its current operations and result in adjustments in the
value of the Group’s assets and liabilities.
Based on the above-described measures and assumptions, as well as the Budget for the next 12 months, the
management of the Group believes that the Group's financial resources – including the extension of the credit facility as
mentioned above- will be sufficient to cover the Group's operating expenses and capital expenditure for the next
12 months (i.e.: for the 12-month period ending as of March 31, 2013. In the case the financial resources of the Group
would not be sufficient, the management believes that the credit facility would be extended beyond December 31, 2012.
2.2. Accounting principles
The basic method used to measure accounting items is the historical cost method.
The principal approaches used are as follows:
 Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are measured at cost (purchase price and incidental expenses).
They are depreciated over periods which vary according to the nature of the asset:
- Software 1 to 3 years
- Machinery and tools 1 to 4 years
- Improvements and fittings 10 years
- Furniture 2 to 10 years
Property, plant and equipment is depreciated on a straight-line basis.
 Financial assets
The gross value of investments in subsidiaries and associates corresponds to the historical cost of the corresponding
securities, including costs directly attributable to the acquisition.
Securities acquired subject to an earn-out are adjusted according to the definitive price.
An impairment provision is recognized whenever the carrying amount exceeds the recoverable amount of the assets.
The recoverable amount is calculated using a variety of criteria, including those applied when the asset was originally
acquired (including stock market multiples), market values, expected returns based on discounted future cash flows, and
adjusted net worth.
If applicable, in the event that the recoverable amount is negative, in addition to recognizing an impairment loss, the
other assets held are also written down and, if necessary, a contingency provision is recognized.
 Receivables
Receivables are recognized at their nominal value. The Company recognizes a provision for impairment whenever their
gross carrying amount exceeds fair value.
 Transactions in foreign currencies
Income and expense items denominated in foreign currencies are recognized at their equivalent value in euros at the
transaction date. Liabilities, receivables and cash denominated in foreign currencies are translated using the exchange
rate at the balance sheet date. Differences arising on the translation of liabilities and receivables in foreign currencies
are recorded in the balance sheet under “Unrealized foreign exchange gains (losses)”.
A contingency provision is recognized for unrealized foreign exchange losses not offset by gains.
 Bond issue costs, premiums, discounts and redemptions
Bonds are recognized at the issue's nominal value. Costs and premiums are recognized in assets under “Accruals” and
are amortized in financial income over the life of the bonds, unless the redemption risk is hedged.
 Stock options
Stock options are accounted for as and when the options are exercised, as share issues with a value equal to the
exercise price paid by the option holders. Any difference between the exercise price and the nominal value of shares is
recognized as a premium over par.
 Performance shares to be issued
Atari recognizes performance shares to which beneficiaries' rights have vested at the time those shares are issued, by
deducting an amount equal to the nominal value of the shares issued from available reserves.
 Consolidated Tax Group
Atari and some of its French subsidiaries have set up a consolidated tax group. Under the tax consolidation agreement,
each entity calculates its tax expense as if no consolidation existed. The tax savings resulting from the use of the tax-
loss carry forwards of other consolidated subsidiaries are immediately recognized in income by Atari and no subsequent
cash refund is made. Whenever subsidiaries post profits, Atari may be subject to additional taxation as a result of the
previous deductions made of losses by those subsidiaries. During the fiscal period ended March 31, 2012, Atari SA was
the parent company of the consolidated group made up of Atari SA, Eden Games and Atari Europe.