Peachtree 2012 Annual Report Download - page 83

Overview
Performance
Governance
Notes to the Group financial statements
Group accounting policies
General information
The Sage Group plc (“the Company”) and its subsidiaries (together “the
Group”) is a leading global provider of business management software to small
and medium sized companies. The Group has over six million customers and
more than 13,500 employees in 24 countries covering Europe, Americas,
Africa, Australia, Middle East and Asia.
The Company is a limited liability company incorporated and domiciled in the
UK. The address of its registered office is North Park, Newcastle upon Tyne,
NE13 9AA.
The Company is listed on the London Stock Exchange.
The Group consolidated financial statements were authorised for issue by
the Board of directors on 5 December 2012.
a Basis of preparation
The consolidated financial statements of The Sage Group plc have been
prepared in accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the European Union (“EU”) and International Financial
Reporting Standards Interpretations Committee (“IFRIC”) interpretations as
adopted by the EU. The consolidated financial statements have been prepared
under the historical cost convention, except where adopted IFRS require
an alternative treatment. The principal variations from the historical cost
convention relate to derivative financial instruments which are measured at
fair value through profit or loss.
The preparation of the consolidated financial statements in conformity with
IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in note B.
The directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not less than
12 months from the date of this report. Accordingly, the consolidated
financial statements have been prepared on a going concern basis and
in accordance with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Standards, amendments and interpretations effective in 2012
The following standards, amendments and interpretations to standards have
been adopted in the financial statements. None had any impact on the Group
results or financial position:
IFRIC interpretations
amendment to IFRIC 14, “Prepayments of a Minimum Funding Requirement”
Amendments to existing standards
Annual Improvements to IFRSs 2010
amendment to IFRS 1, “First-time Adoption of IFRS”
amendment to IFRS 7, “Financial Instruments: Disclosures”
amendment to IAS 24 (revised 2011), “Related Party Disclosures”
There are no other IFRS or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Group.
b Basis of consolidation
The financial statements of the Group comprise the financial statements
of the Company and entities controlled by the Company (its subsidiaries)
prepared at the end of the reporting period. The accounting policies have
been consistently applied across the Group. Control is achieved where the
Company has the power to govern the financial and operating policies of an
entity so as to benefit from its activities.
The results of subsidiaries acquired during the year are included in the
Consolidated income statement, Consolidated statement of comprehensive
income and Consolidated statement of cash flows from the date of control.
They are de-consolidated from the date that control ceases.
All intra-group transactions, balances, income and expenses are eliminated
on consolidation.
The Group treats transactions with non-controlling interests as transactions
with equity owners of the Group. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying value of
net assets of the subsidiary is recorded in equity.
Where the Group enters into put and call arrangements over shares held by a
non-controlling interest, the Group continues to recognise the non-controlling
interest until the ownership risks and rewards of those shares transfer to
the Group.
The results of discontinued operations are shown as a single amount on the
face of the income statement comprising the post-tax profit or loss of
discontinued operations and the post-tax gain or loss recognised either on
measurement to fair value less costs to sell or on the disposal of the
discontinued operation.
c Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method.
The cost of the acquisition is measured at the aggregate of the fair values at
the date of exchange, of assets given, liabilities incurred or assumed and
equity instruments issued by the Group in exchange for control of the
acquiree. The acquiree’s identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3 (Revised), “Business
Combinations” are recognised at their fair values at the acquisition date.
Any contingent consideration to be transferred by the Group is recognised
at fair value at the acquisition date. Subsequent changes to the fair value
of the contingent consideration that is deemed to be an asset or liability is
recognised in the income statement. Contingent consideration that is classified
as equity is not re-measured, and its subsequent settlement is accounted for
within equity.
Goodwill represents the excess of the consideration transferred, the amount of
any non-controlling interest in the acquiree and the acquisition date fair value
of any previous equity interest in the acquiree over the fair value of the Group’s
share of the identifiable net assets acquired. If, after reassessment, the
Group’s interest in the net fair value of the acquiree’s identifiable assets,
liabilities and contingent liabilities exceeds the cost of the business
combination, the difference is recognised directly in the Consolidated income
statement. Any subsequent adjustment to reflect changes in consideration
arising from contingent consideration amendments is recognised in the
Consolidated income statement.
On an acquisition by acquisition basis, the Group recognises any
non-controlling interest in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets.
Acquisition-related items are expensed as incurred.
d Segment reporting
The Group’s segmental analysis has been derived using the information used
by the chief operating decision maker. The Group’s Executive Committee has
been identified as the chief operating decision maker as the Committee is
responsible for the allocation of resources to operating segments and
assessing their performance.
Segment assets include all intangible assets, property, plant and equipment,
inventories, trade and other receivables, cash and cash equivalents and tax
assets. Segment liabilities comprise mainly trade and other payables,
Financial statements
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The Sage Group plc | Annual Report & Accounts 2012