Ubisoft 2012 Annual Report Download - page 91

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Financial Statements
2012
86
Estimate
Main sources of estimates
1.6.3
Main acquisitions, disposals and
changes in consolidation scope
Where appropriate, presentation of the main valuation methods and
assumptions used when identifying intangible assets during business
combinations.
1.6.5.3
Impairment losses
Main assumptions used to determine the recoverable value of assets.
Note 13
Employee benefits
Discount rate, rate of inflation, rate of return on plan assets and wage
growth.
Note 14
Payments in shares
Model and underlying assumptions used to determine fair values.
Note 12
Provisions
Underlying assumptions made to appraise and estimate risks.
Note 19
Sales
The assumptions used for provisions and return on sales are based on
expected stocks of 3 to 6 months after closing.
Note 25
Corporation tax
Assumptions used to recognize deferred tax assets and methods of
applying tax legislation.
The accounting methods outlined below were applied:
– On a permanent basis to all periods presented in the consolidated financial statements;
– Consistently by all Group entities.
1.6.5.3 CONSOLIDATION PRINCIPLES
Subsidiaries
A subsidiary is an entity controlled by Ubisoft Entertainment SA. Control exists where the Company
has the power to manage, either directly or indirectly, the entity’s financial and operational policies in
order to obtain benefits from its activities. In assessing control, the Group takes into account the
potential voting rights that are currently exercisable.
The financial statements of subsidiaries are included in the consolidated financial statements from the
date when control is obtained to the date when such control ends.
If necessary, the accounting methods of subsidiaries are amended to align them with those adopted
by the Group.
Associates
Associates are entities over which Ubisoft Entertainment SA exercises significant influence on the
financial and operational policies but no control. The consolidated financial statements include the
Group share in the total amount of profits and losses recognized by the associates, using the equity
accounting method, starting from the date when significant influence is exercised to the date when
such influence ends.
Ubisoft consolidates ad hoc entities in which the Company does not hold a direct or indirect interest
but which it controls in substance because it has the right to receive the majority of benefits or it
retains the majority of residual risks inherent to the ad hoc entity or its assets.
As at March 31, 2012, all companies controlled by the Group are fully consolidated; only Related
Designs Software GmbH, in which the Group has a 30% interest, is accounted for under the equity
method.
Transactions eliminated in the consolidated financial statements
Balance sheet amounts, income and expenses resulting from intragroup transactions are eliminated
during the preparation of the consolidated financial statements.
Gains resulting from transactions with associates are eliminated up to the Group’s percentage interest
in the company.
Losses are eliminated in the same way as gains, but only to the extent that they are not indicative of
impairment.