Ubisoft 2013 Annual Report Download - page 111

Financial Statements
2013
106
paid during the period. The Group has no subsequent obligations to its employees. For Ubisoft, this
generally involves public retirement plans and specific defined-contribution plans.
- In defined benefit plans, the employee receives a fixed pension benefit from the Group,
determined on the basis of several factors, including age, length of service and compensation level.
Within the Group, such plans are used in France, Italy and Japan.
The employer’s future obligations are measured on the basis of an actuarial calculation called the
“projected unit credit method”, in accordance with each plan’s operating procedures and the
information provided by each country. This method involves determining the value of likely discounted
future benefits of each employee at the time of his/her retirement. Following the early application of the
revised IAS 19 standard, actuarial gains and losses are recognized in other comprehensive income.
The discount rate of 2.97% (compared to 4.46% at March 31, 2012) is determined on the basis of
market rates for high-quality corporate bonds (IBBOX AA10 rate), average of last 12 months of AA-
rated corporate bonds over 10 years or more).
Individual training right (DIF)
Full-time employees of French companies are entitled to between 20 and 21 hours of training each
year, depending on the collective agreement provisions applicable within each company. The rights
acquired each year may be accrued for up to six years. The total training acquired amounts to 88,405
hours and is recognized as off-balance-sheet commitments.
Payments based on equity instruments
Stock option plans provide an additional incentive for employees to improve the Group’s performance
by allowing them to purchase a stake in the Company (stock options, bonus shares, Group savings
scheme).
In accordance with IFRS 2, share-based compensation of equity instruments are recognized as
personnel expenses in return:
- for consolidated reserves when they are settled by transfer of shares to the beneficiaries, and the
fair value of the instruments assessed at the date of grant;
- for a liability when they are settled in cash, whose liability is revalued at fair value at each balance
sheet date.
This expense is spread over the vesting period, assuming presence on the vesting date and possibly
performance conditions attached.
x Stock option plans: the compensation is recognized in income over the vesting period;
however, the straight-line method is not used, given the vesting terms set out in the various
Ubisoft plan regulations; Ubisoft uses a binomial model to estimate the value of such
instruments. This method is based on assumptions updated on the valuation date, such as
estimated volatility of the security concerned, a risk-free discount rate, the estimated dividend
rate and the likelihood of staff remaining in the Group until they can exercise their rights.
x Group employee savings plan: the accounting expense is equal to the discount granted to
employees, i.e. the difference between the share subscription price and the share price at the
date of the grant. This expense is recognized immediately on the plan subscription date.
x bonus shares settled in shares: the cost of this compensation is recognized in income over the
vesting period, allowing for the vesting terms.
x bonus shares settled in cash: recognition as a result of this compensation is recognized over
the vesting period of the rights. The accounting expense depends on the value of the share on
Euronext Paris and contingent upon attendance and performance conditions.
The dilutive effect of stock option plans and bonus share grants when the unwinding of the instrument
involves the issue of Ubisoft shares and the vesting period is in progress, is reflected in the calculation
of diluted earnings per share.