Ubisoft 2013 Annual Report Download - page 102

Financial Statements
2013
97
Estimate
Key sources of estimation
§ 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 on business
combinations.
§ 1.6.5.3
Impairment losses
Main assumptions used to determine the recoverable value of assets.
Note 13
Employee benefits
Discount rate, inflation, 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
Sales͓
The assumptions used for reserves and returns revenues are based on
expected inventory of 3 to 6 months after closing.
Note 24
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.
CONSOLIDATION PRINCIPLES 1.6.5.3
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 consideration
potential voting rights that are currently exercisable.
The financial statements of subsidiaries are included in the consolidated financial statements from the
date on which control is obtained to the date at which 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 at which
such influence ends.
Ubisoft consolidates ad hoc entities in which the Company does not hold a direct or indirect interest
but that 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, 2013, 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, and 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 for 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.