Ubisoft 2014 Annual Report Download - page 119

Financial statements
2014
114
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, equity and bonds, 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.
Bank overdrafts are included in cash and cash equivalents as they are an integral part of the
Company’s cash management. They are presented in liabilities, but are also offset against cash in the
cash flow statement.
Recognition and measurement of financial assets (excluding derivatives)
In accordance with IAS 39 – Financial Instruments: Recognition and Measurement, financial assets
are broken down into four categories:
- Assets held to maturity (securities granting entitlement to fixed or determinable payments on
set dates, and which the Group is able and intending to hold to maturity)
- Loans and receivables (non-derivative financial assets subject to fixed or determinable
payments, and which are not listed on an active market)
- Assets held for trading (investments or securities bought and held primarily with a view to a
short-term resale)
- Available-for-sale assets (all financial assets not recognized in one of the three previous
categories)
Classification depends on the nature and objective of each financial asset, and is determined when
first recognized.
The Group has no financial assets classified as “held-to-maturity.”
 Loans and advances (loans and receivables category)
They include security deposits.
When initially recognized, loans and advances are measured at fair value. These financial assets are
then recognized at amortized cost using the effective interest rate method. They are tested for
recoverable value, carried out whenever there are objective indicators (third party financial position)
that the recoverable value of these assets would be lower than the balance sheet value, and at least
on each balance sheet date.
 Grants (loans and receivables category)
In some countries, video game production operations qualify for public grants.
These grants are presented as a reduction in research and development costs and a reduction of the
asset corresponding to the development of commercial software.
Any claims on the public body which awarded the grant are classified as loans and receivables as per
IAS 39.
The Group analyzed the CICE as an operating subsidy within the scope of IAS 20 to the extent that
the tax credit meets the definition of government assistance under IAS 20.3. An accrual has been
recognized in respect of eligible wages paid during the current financial year and presented as a
reduction in personnel costs allocated to related destinations in the income statement. (see note 20)