Ubisoft 2012 Annual Report Download - page 92

Financial Statements
2012
87
Translation of transactions denominated in foreign currencies
Transactions denominated in foreign currencies are translated by applying the exchange rate in force
on the date of the transaction.
At the end of the financial year, all monetary assets and liabilities denominated in foreign currencies
(excluding derivatives) are translated into euros at the closing exchange rate. Any resulting translation
adjustments are recorded in the income statement.
Non-monetary assets and liabilities denominated in foreign currencies are recognized at the exchange
rate in force on the date of the transaction.
Derivatives are measured and recognized in accordance with the methods described in the note on
financial instruments.
Translation into euros of the financial statements of foreign subsidiaries
The operating currency of Ubisoft’s foreign subsidiaries is their local currency, in which they record
most of their transactions. The assets and liabilities of Group companies whose operating currency is
not the euro are translated into euros at the exchange rate in force at the end of the accounting period.
The income and expenses of these companies, along with their cash flows, are translated at the
average exchange rate over the year. Differences arising from translation are recognized directly in
consolidated equity, as a separate item.
Goodwill and fair value adjustments resulting from the acquisition of a foreign entity are regarded as
belonging to the foreign entity and are therefore expressed in the entity’s operating currency. They are
translated at the closing rate in force at the end of the accounting period.
Upon disposal of a foreign subsidiary, the related translation reserves, recorded in other
comprehensive income, are recognized in profit or loss.
The Group does not operate in countries considered to be suffering from hyperinflation.
Goodwill
Business combinations are accounted for under the purchase method on the acquisition date, which is
the date when control is transferred to the Group.
Acquisitions since January 1, 2010
For acquisitions completed since January 1, 2010, the Group measures goodwill at the acquisition
date as:
 The fair value of the consideration transferred, plus
 The amount recognized of non-controlling interests in the acquiree; plus, if the business
combination is achieved in stages, the fair value of any equity interest previously held in the
acquiree; less
 The recognized net amount (usually at fair value) of the identifiable assets acquired and the
liabilities assumed.
When the difference is negative, a bargain purchase gain is immediately recognized in profit or loss.
The consideration transferred excludes amounts relating to the settlement of pre-existing relationships.
These amounts are generally recognized in profit or loss.
Acquisition-related costs, other than those related to the issuance of debt or equity securities, that the
Group bears on account of a business combination are recognized as expenses when incurred.
Any contingent consideration to be paid is recognized at fair value at the acquisition date. The
contingent consideration classified as equity is not remeasured and its settlement is recorded in