Ubisoft 2012 Annual Report Download - page 96

Financial Statements
2012
91
Non-current assets with a fixed useful life
For property, plant and equipment and intangible assets with a fixed useful life, an impairment test is
performed whenever indicators suggest impairment.
These tests involve comparing the net carrying amount of assets to their recoverable value – which is
the higher of fair value minus costs of sale, and value in use – estimated on the basis of the current
net value of future cash flows generated by their use.
When the fair value of property, plant and equipment or an intangible asset (excluding goodwill)
increases over a financial year, and the recoverable value exceeds the asset’s carrying amount, any
impairment recognized during previous years will be written back into profit or loss.
Type of asset
Impairment method
Office software
No impairment test in the absence of any indication of impairment.
Information system costs
No impairment test in the absence of any indication of impairment.
Commercial software
At the end of each year and for each software program, expected cash flows are calculated
(over a maximum period of 2 years). When these cash flows are below the net carrying amount
of the software, impairment is recognized.
Engines
No impairment test in the absence of any indication of impairment.
External developments
At the end of each year and for each software program, expected discounted cash flows are
calculated (for a maximum period of two years). When these cash flows are below the net
carrying amount of the software, impairment is recognized.
Property, plant and
equipment
No impairment test in the absence of any indication of impairment.
Investments in associates
Investments in associates include the Group’s share of the equity held in companies accounted for
under the equity method, together with any related goodwill.
Inventory
Inventory is valued at the lower of cost or net realizable value.
Cost includes the purchase price plus incidental expenses and is valued according to the CMP
method.
Net realizable value is the estimated sale price in the normal course of business minus estimated
completion costs and estimated selling costs, which include marketing and distribution costs.
No borrowing costs are included in the cost of inventory.
A provision for impairment is recorded when the likely net realizable value falls below the carrying
amount. Reversals of impairment on inventory are recorded as a reduction in the amount of inventory
expensed during the financial year in which the reversal occurs.
Financial assets and liabilities
Financial assets include the non-current investments of non-consolidated companies, short-term and
long-term loans and advances, trade receivables, derivatives with a positive market value, investment
in securities, and cash.
Financial liabilities include bank borrowings, obligations relating to finance lease contracts, other
financing (current account advances), bank overdrafts, derivatives with a negative market value and
trade payables.
Financial assets and liabilities are presented as “non-current”, except those with a maturity of less than
12 months from the year-end date. These are presented as “current assets”, “cash equivalents” or
“current liabilities” depending on the circumstances.