Ubisoft 2014 Annual Report Download - page 166

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Financial statements
2014
161
On their release date, the development costs of commercial software and external software
developments, recognized as “intangible assets in progress” as development progresses, are
transferred to “released commercial software” or “released external software developments”.
Depreciation, amortization and value impairment methods
Amortization method
Impairment method
Acquired brands
No amortization due to
indefinite useful life
Impairment tests are carried out on brands
at the end of each financial year or more
often if there are indications of loss in value.
The recoverable value of brands is defined
using the royalty method to forecast revenue
associated with the brand tested (taking a
final value into account). Impairment is
recognized when this value is below the net
accounting value.
Office software
1 year, straight-line
No impairment test in the absence of any
indication of impairment.
Information system
costs
5 years, straight-line
No impairment test in the absence of any
indication of impairment.
Commercial software
1 or 2 years, straight-line,
starting on the commercial
release date
At the end of each year and for each
software program, expected cash flows are
calculated (over a maximum period of 2
years). When these flows are below the net
accounting value of the software, impairment
is recognized.
Engines and tools
Straight-line over the useful
life of 3 years
No impairment test in the absence of any
indication of impairment.
External software
developments
According to the sold
quantities and the royalty
rates specified in the
contracts
At the end of each year and for each
software program, expected cash flows are
calculated (over a maximum period of 2
years). When these flows are below the net
accounting value of the software, impairment
is recognized.
According to the regulations on depreciation and impairment of assets, the Group is requested to
periodically revise its depreciation periods based on the observed useful life.
Provisional data are updated using a rate based on a valuation of the average cost of capital, which
stood at 8.89% at March 31, 2014, against 8.94% at March 31, 2013.
Property, plant and equipment
These are recognized at their historical cost. They are depreciated over their useful life. The following
depreciation rates are used:
Type of asset
Depreciation method
Buildings
20 years, straight-line
Equipment
5 years, straight-line
Fixtures and fittings
10 years, straight-line
Computer hardware
3 years, straight-line
Office furniture
10 years, straight-line