Ubisoft 2007 Annual Report Download - page 67

CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2008
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Income tax
Income tax (income or expense) includes the current tax
expense (income) and deferred tax expense (income). Tax
is recognized in income, unless it relates to items that are
recognized directly in equity, in which case it is recognized
in equity.
Current tax
Current tax is the estimated amount of tax owed on taxable
income for an accounting period. It is determined using the
tax rates applicable at closing date.
Deferred tax
Deferred income tax is measured using the balance sheet
liability method for all temporary differences between the
carrying amount of the assets and liabilities and their tax
basis. Measurement of deferred tax assets and liabilities
depends on the way in which the Group expects to recover
or settle the carrying amount of the assets and liabilities
using the tax rates applicable at the balance sheet date.
A deferred tax asset is only recognized where it is likely
that the Group will have future taxable income against
which the asset may be utilized. Deferred tax assets are
reduced to the extent that it is no longer likely that suffi-
cient taxable income will be available.
The impact of possible changes in tax rates on previously
recorded deferred tax is recognized in income except
where it relates to an item recognized in equity.
Deferred tax is shown in the balance sheet separately from
current tax assets and liabilities and are classified as non-
current items.
Segment reporting
In light of the Group's organizational structure and the
commercial relationships between the various subsidiaries,
we proceed on the basis that the Group operates in a sin-
gle market with several geographic regions.
Dividends
No dividend had been paid as of March 31, 2008 in respect
of 2006-2007 earnings.
Earnings per share
Basic earnings per share
Basic earnings per share are equal to earnings divided by
the weighted average number of shares in circulation less
own shares.
Diluted earnings per share
Diluted earnings per share are equal to:
- Earnings before dilution, plus the after-tax amount of
any savings in financial expenses resulting from the con-
version of the diluting instruments, divided by
- The weighted average number of ordinary shares in cir-
culation, less own shares, plus the number of shares that
would be created as a result of the conversion of conver-
tible instruments into shares and the exercise of rights.
Earnings from continuing operations
as of March 31, 2008 €95,017,000
Weighted average number
of shares in circulation: 45,874,127
Dilutive shares: 2,142,367
Weighted average number
of shares after exercise of the
rights on dilutive instruments: 48,016,493
Diluted earnings per share from continuing operations as
of March 31, 2008: €1.98
Earnings from discontinued operations
as of March 31, 2008 €14,827,000
Weighted average number
of shares in circulation: 45,874,127
Dilutive shares: 2,142,367
Weighted average number
of shares after exercise of the
rights on dilutive instruments: 48,016,493
Diluted earnings per share from discontinued operations
as of March 31, 2008: €0.31
New standards and interpretations not applied
Some new standards, amendments to standards and inter-
pretations are not yet applicable to the 12 month period
ended March 31, 2008, and have therefore not been used
for the preparation of the consolidated financial state-
ments:
IFRS 8 “Operating segments” introduces the “direction
approach” to establish the segment reporting. IFRS 8,
which will be compulsory for the 2009 group financial
statements, requires that the note on segment reporting
is based on internal reporting regularly examined by the
group main operational decision-maker, in order to eva-
luate each performance sector and allocate recourses.
As of group organisation and commercial links between
all subsidiaries, we consider the group as one market and
work on several geographic zones.
IAS 23 revised “borrowing costs” suppress the option of
expense the cost of borrowings and impose that an entity
activate the cost of borrowings directly attached to the
acquisition, the construction or the production of a qua-
lified asset. This standard, compulsory for the 2009
group financial statements, will be a change in accoun-
ting method. Agreed with the transitional measures, the
group will apply IAS 23 revised for qualified assets which
the cost of borrowing will begin with the current stan-
dard date. It might not have any impact on consolidated
statements.
IFRIC 11 “IFRS 2 - Group and Treasury Share Transactions”
impose that an agreement which payment is founded on
shares and for what the entity receive products or services
as compensation of own equities, should be accounted by
the same way as a payment founded on shares and paid by
equities, however the group obtain those Equities
Instruments. IFRIC 11 will be retrospectively compulsory in
the Group Financial Statements 2009. It might not have
any impact on consolidated statements.