Ubisoft 2016 Annual Report Download - page 117

Financial statements
5
Consolidated fi nancial statements asatMarch31, 2016
Other intangible assets
Other intangible assets include:
♦ commercial software developments;
♦ external software developments;
♦ engines and tools;
♦ information system developments;
♦ offi ce software.
Accounting and subsequent valuation
The intangible assets of companies included in the scope of
consolidation are recorded at their net carrying amount (historical
acquisition cost less cumulated amortization and impairment losses).
In accordance with IAS 38 – Intangible assets, items are only
recognized as non-current assets where the cost can be determined
reliably and it is likely that they will generate future economic
benefi ts.
No borrowing costs are included in the costs of property, plant
and equipment.
Commercial software and external software developments
(commercial software)
Development costs of commercial software (video games), whether
outsourced to Group subsidiaries or externally, are recognized in
“in-house software and external software development in production”
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 specifi ed in the agreement including the portion not yet paid.
Depreciation, amortization and value impairment
methods
Within the context of IAS 38, the Group is requested to periodically
revise its amortization periods based on the observed useful life.
Furthermore, the Group performs impairment tests at the end of
each fi nancial year, or whenever indication of impairment appears.
These tests involve comparing the net carrying amount of assets
to their recoverable value – which is the higher of fair value minus
costs of sale, and value in use – estimated on the basis of the current
net value of future cash fl ows generated by their use.
When the fair value of intangible assets (excluding goodwill)
increases over a fi nancial year, and the recoverable value exceeds
the asset’s carrying amount, any impairment recognized during
previous years will be written back into profi t or loss.
The depreciation and impairment methods used for the various
types of intangible assets are as follows:
Types of non-current
assets Depreciation method Asset impairment method with a fi xed useful life
Commercial software
developments
1 to 3 years, straight-line, starting on
thecommercial release date At the end of each fi nancial year and for each software program,
expected cash fl ows are calculated (over a maximum period of 2 years).
When these fl ows are below the net accounting value of the software,
impairment is recognized.
External developments
Depending on quantities sold and royalty
rates indicated in contracts or on
theduration of the contract
Engines and tools 3 years, straight-line
No impairment test in the absence of any indication of impairment.
Information system
developments Straight-line, 3 or 5 years
Acquired brands No amortization due to indefi nite useful life
Impairment tests are carried out on brands at the end of each fi nancial
year or more frequently if there are indications of loss in value. The
recoverable value of brands is defi ned using the royalty method to
forecast revenue associated with the brand tested (taking a fi nal value
into account). Impairment is recognized when this value is below the net
accounting value.
Offi ce software Straight-line, 1 or 3 years No impairment test in the absence of any indication of impairment.
Property, plant and equipment
Property, plant and equipment are measured at their acquisition cost
(purchase price plus incidental expenses) minus rebates, discounts,
and any investment subsidies granted.
Property, plant and equipment are then recorded at their net carrying
amount (historical acquisition cost less cumulated amortization and
impairment losses) at the time of their inclusion into the scope of
consolidation.
No borrowing costs are included in the costs of property, plant
and equipment.
Given the type of assets held, no component was identifi ed.
- Registration Document 2016 115