Ubisoft 2008 Annual Report Download - page 148

146
UBISOFTANNUAL REPORT 2009
Provisions
A provision is recorded when:
• The Company has a current obligation (legal or implicit) resulting from a past event;
• It is likely that an outow of resources representing economic benets will be required to settle the obligation;
• The amount of the obligation can be measured reliably.
If these conditions are not met, no provision is recorded.
Revenues
Sale of games
Revenue from the sale of gaming software is recorded on the date products are delivered to clients. A provision for estimated
returns is recorded for the net amount of the sale as a decrease in revenues. Under the terms of its contracts with customers,
the Group does not have to accept returns but it may exchange products sold to certain customers. Furthermore, the Group may
provide a return guarantee or grant discounts on unsold products or other benets to certain customers. In this case, the Group's
management estimates the amount of future credit notes and books a provision.
Licences
The Group may issue licences in consideration of a guaranteed minimum royalty. This royalty is recorded in income when
the signicant benets and risks attached to goods have been transferred to the buyer.
Additional revenue on sales, above the guaranteed minimum royalty, is recorded as and when the sales are completed.
Services
Income corresponding to development and publishing services on behalf of third parties includes royalties and other remunerations,
which are regarded as arising and booked in sales as and when the service is rendered.
Current operating income and operating income
Operating income includes all revenues and costs directly linked to Group activities, whether these revenues and costs are recurrent
or resulting from one-off decisions or operations. Exceptional items, dened as revenues and expenses that are unusual in their
frequency, nature and/or amount, belong to operating income. Current operating income is equal to operating income before
inclusion of items whose amount and/or frequency are unpredictable by nature.
The Group feels that presenting the "current operating income" sub-total separately on the income statement makes it easier to
understand recurrent operating performance and provides readers of the nancial statements with information useful in analysing
said performance.
Financing costs and other nancial income and expenses
The cost of net nancial debt includes income and expenses linked to cash and cash equivalents, interest expenses on borrowings
which include the sale of investment securities, creditor interest and the cost of ineffective currency hedging.
Other nancial income and expenses include the sale of non-consolidated securities, capital gains or losses, provisions/reversals
of impairment losses on nancial assets (other than trade receivables), income and expenses linked to the discounting of assets
and liabilities, and foreign exchange gains and losses on unhedged items.
The impact on prot and loss of measuring nancial instruments used in the management of foreign exchange risks is recognised
in operating income.