Ubisoft 2016 Annual Report Download - page 118

Financial statements
5Consolidated fi nancial statements asatMarch31, 2016
The depreciation method used, throughout the Group, is straight-
line and the depreciation periods used for the various types of non-
current assets are as follows:
Type of asset Period (in years)
Buildings 15 to 25
Fixtures and fi ttings 10
Offi ce furniture 10
Transport equipment 5
Equipment 5
Computer hardware 3
According to international standard IAS16, the Group is led to
periodically revise its durations depreciation based on the observed
useful life.
No impairment test is performed in the absence of any indication
of impairment.
Non-current assets acquired under fi nance leases
Leases that transfer practically all risks and benefi ts inherent in
ownership of the asset are classifi ed as fi nance leases.
Non-current assets fi nanced via fi nance leases are restated in the
consolidated fi nancial statements so as to refl ect the position that
would have existed if the Company had used borrowed funds to
acquire the assets directly.
The amount recognized on the asset side is equal to the fair
value of the asset leased or, if this value falls below the present
value of the minimum lease payments, the fair value minus
accumulated depreciation and impairment. Costs associated with
the establishment of the agreement are incorporated in the asset
input value in the balance sheet.
Investments in associates
Investments in associates include the Group’s share of the equity
held in companies accounted for under the equity method, together
with any related goodwill.
Inventory and work in progress
Inventory is valued using the weighted average cost method.
The gross value of inventory is measured at the lower of acquisition
cost and net realizable value.
The acquisition cost is the purchase price plus incidental expenses.
Net realizable value is the estimated sale price in the normal course
of business minus estimated completion costs and estimated selling
costs, which include marketing and distribution costs.
No borrowing costs are included in the cost of inventory.
Impairment is recorded when the likely net realizable value falls
below the carrying amount. Reversals of impairment on inventory
are recorded as a reduction in the amount of inventory expensed
during the fi nancial year in which the reversal occurs.
Financial assets and liabilities
Financial assets include:
♦ non-current investments of non-consolidated companies;
♦ short-term and long-term loans and advances;
♦ trade receivables;
♦ derivatives with a positive market value;
♦ investment securities;
♦ cash.
Financial liabilities include:
♦ bank borrowings, equity and bonds;
♦ commercial paper;
♦ obligations relating to fi nance lease agreements;
♦ other fi nancing (current account advances);
♦ bank overdrafts and short-term loans;
♦ derivatives with a negative market value;
♦ 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
fl ow statement.
Recognition and measurement of financial assets
(excluding derivatives)
In accordance with IAS 39 – Financial instruments: recognition and
measurement, fi nancial assets are broken down into four categories:
1. assets held to maturity (securities granting entitlement to
fi xed or determinable payments on set dates, and which the
Group is able and intending to hold to maturity);
2. loans and receivables (non-derivative fi nancial assets
subject to fi xed or determinable payments, and which are not
listed on an active market);
3. held-for-trading assets (investments or securities bought
and held primarily with a view to a short-term resale);
4. available-for-sale assets (all fi nancial assets not recognized
in one of the three previous categories).
Classifi cation depends on the nature and objective of each fi nancial
asset, and is determined when fi rst recognized.
- Registration Document 2016
116