Ubisoft 2000 Annual Report Download - page 49

d) Tangible fixed assets
Fixed assets are shown in the Balance Sheet at their acquisition cost.
Depreciation, which is calculated using rates standardized throu-
ghout the Group, is determined on the basis of the methods and per-
iods of use set out below:
>Equipment: 5 years (straight-line)
>Fixtures and fittings: 5 and 10 years (straight-line)
>Computer equipment: 3 years (diminishing balance)
>Office furniture: 10 years (straight-line)
e) Financial fixed assets
The gross value of equity holdings corresponds to the cost of acqui-
sition or the payment in cash for the shares of non-consolidated
companies.
The value of an equity holding is reviewed at the end of each finan-
cial year on the basis of the net position of the subsidiary concerned
on that date and its prospects for growth over the medium term. A
provision for depreciation is made if necessary.
f) Fixed assets acquired through leasing arrangements
Significant capital assets which are financed by leasing agreements
are restated in the Consolidated Accounts as if the Company had
acquired the assets directly using loan finance.
g) Inventory and work-in-progress
The inventories of all Group companies are valued, after eliminating
internal margins, on the basis of the cost prices determined in nor-
mal trading.
Inventory is valued using the moving-average method. The gross
value of goods and supplies includes the purchase price and related
expenses. Financial costs are excluded from inventory valuation in
all cases.
A provision for depreciation is made where the probable net realiza-
ble value is less than the book value.
h) Advances and installments received
Licenses cover distribution and reproduction rights acquired from
other publishers. The signing of licensing contracts entails the pay-
ment of guaranteed amounts, recorded in account no. 409.
However, if sales are less than estimated, supplementary amortiza-
tion will be undertaken.
i) Trade receivables
Trade receivables are entered at their face value. Where applicable, a
provision for depreciation may be entered according to the degree of
certainty as to ultimate collection existing at the account closing date.
j) Investment securities
Investment securities consist of equity shares, investment securities
and short-term investments, which are booked at their purchase
price or, whenever it is lower, their market price.
k) Cash
Cash consists of cash and bank accounts.
l) Deferred taxation
Deferred taxes are entered in the income statement and the balance
sheet to reflect the difference between financial years when certain
expenditures and revenues are entered into the consolidated
accounts and the financial years when they are used to calculate
taxable revenue.
Deferred taxes are entered in the income statement and the balance
sheet to reflect deficits carried forward in the year when it seems
likely they will be recovered.
In accordance with the liability method of tax allocation, the effect of
any changes in tax rates on deferred taxes recorded earlier is ente-
red into the income statement for the financial year in which the
changes in rates become known.
m) Conversion of items expressed in foreign currencies
Conversion into French francs of transactions of French companies
carried out in foreign currencies
Charges and revenue for foreign currency transactions are entered at
their equivalent value on the transaction date.
Assets and liabilities are usually converted at the closing rate, with
any exchange variations resulting from this conversion being recor-
ded in the income statement.
Conversion of the financial statements of foreign subsidiaries into
French francs
The assets and liabilities of foreign subsidiaries are converted at the
exchange rate in force at the closure of the financial year, while the
income statement is converted at the average annual rate.
n) Provisions for risks and charges
Provisions for risks and charges are made when risks and charges
which relate to a clearly determined object, but which are not certain
to arise, are made more likely by events which have occurred or are
in progress.
o) Fully diluted earnings per share
This figure is obtained by dividing:
>net earnings before dilution, plus the amount after tax of any savings
in financial costs resulting from the conversion of the diluting
instruments
>by the average weighted number of ordinary shares in circulation
plus the number of shares which will be created following the
conversion of convertible instruments into shares and the exercising
of rights.
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