Ubisoft 2014 Annual Report Download - page 120

Financial statements
2014
115
 Trade receivables (loans and receivables category)
Trade and other receivables linked to operating activity are recorded at fair value – in most cases the
same as nominal value – minus any loss of value recorded in a special impairment account. As
receivables are due in under a year, they are not discounted.
If there is any indication that these assets may be impaired, they will be subject to an analysis based
primarily on the following criteria: age of the receivable, third party’s financial position, negotiation of a
payment schedule, guarantees received, loan insurance.
The difference between the carrying amount and recoverable value is recorded as operating income.
Impairment may be reversed if the asset regains its value in future. Reversals are recognized in the
same item as provisions. Impairment is deemed permanent when the receivable itself is considered to
be permanently irrecoverable and written off.
 Long-term securities (available-for-sale assets category)
These include the Group’s equity in companies that are not consolidated due to a lack of control or
significant influence.
Shares held in a listed company are recorded in the balance sheet at their fair value, determined on
the basis of the share price on the closing date. Changes in fair value are recognized directly in other
comprehensive income, except when there is a significant or prolonged drop in fair value.
In accordance with IAS 39, Financial Instruments: Recognition and Measurement, if there is a
significant or prolonged decline in the value of a share to below its cost that results in a material latent
loss, impairment is recognized in financial income.
 Cash and cash equivalents (assets held for trading category)
Cash and cash equivalents include cash on hand and deposit accounts with maturity generally under
three months which can be easily liquidated or sold on very short notice, can be converted into cash
and present negligible risks of change in value. Short-term investments are measured at net asset
value at each balance sheet date. Changes in this market value are recognized in financial profit or
loss.
Bank overdrafts repayable on demand are an integral part of the Group’s cash management, and are
included in “cash and cash equivalents” for the purposes of the cash flow statement.
Recognition and measurement of financial liabilities (excluding derivatives)
 Borrowings and other financial liabilities
This category includes borrowings and bank overdrafts.
Bank borrowings and other financial liabilities are measured at amortized cost calculated using the
effective interest rate.
Financial interests accrued on borrowings are included in the “current financial liabilities” in the
balance sheet.
Trade payables and other liabilities are recorded at amortized cost.
Cash flows linked to short-term recoverable amounts are not discounted. Long-term flows are
discounted whenever the impact is significant.
Recognition and measurement of financial derivatives
The Group holds financial derivatives exclusively to manage its exposure to foreign exchange risks.
Ubisoft Entertainment SA hedges these risks with forward sale contracts and currency options.