Ubisoft 2014 Annual Report Download - page 116

Financial statements
2014
111
Development costs relate to the development of commercial software (video games) and are
capitalized as described below.
Development costs of commercial software, whether produced in-house or outsourced, are recognized
in “in-house software and external software development in progress” as development progresses.
Once they are released, these costs are transferred to the “released in-house software” or “released
external software developments” accounts.
Commitments made under license agreements are recognized for the amount specified in the
agreement including the portion not yet paid.
Amortization
Type of asset
Amortization method
Office software
Straight-line, 1 year or 3 years
Information system costs
Straight-line, between 3 and 5 years
Commercial software
1 or 2 years, starting on the commercial release date
Engines and tools
Straight-line over the useful life of 3 years
External software developments
Depending on quantities sold and royalty rates indicated in contracts or on the
duration of the contract
Within the context of IAS 38, the Group is requested to periodically revise its amortization periods
based on the observed useful life.
At the end of each financial year or whenever indication of impairment appears, the Group checks the
recoverable value of capitalized amounts and carries out an impairment test, as described in the Note
“Impairment testing of non-current assets.”
Property, plant and equipment
The gross value of property, plant and equipment includes the acquisition cost minus installments
made and any investment subsidies granted. From it are deducted the cumulative totals for
depreciation and impairment (see accounting methods described in the note on goodwill).
Given the types of non-current assets held, no distinct component of the main non-current assets was
noted.
No borrowing costs are included in the costs of property, plant and equipment.
The same rates are used throughout the Group to calculate depreciation, employing the following
methods and useful lives:
Type of asset
Depreciation method
Buildings
Straight-line, between 15 and 25 years
Equipment
Straight-line, 5 years
Fixtures and fittings
Straight-line, 10 years
Computer hardware
Straight-line, 3 years
Office furniture
Straight-line, 10 years
Transportation equipment
Straight-line, 5 years
According to international standard IAS16, the group is led to periodically revise its durations
depreciation based on the observed useful life.
Non-current assets acquired under finance leases
Leases that transfer practically all risks and benefits inherent in ownership of the asset are classified
as finance leases.