LISI 2012 FINANCIAL REPORT
40
3
Consolidated financial statements
2.2.18 Definition of the concepts “current” and “non
current” in the balance sheet
Assets and liabilities whose maturity is less than the operating
cycle, which is generally 12 months, are classified as current
assets and liabilities. If maturity is later than this, they are
classified as non-current assets and liabilities.
2.2.19 Overview of the income statement
The Group has opted to continue showing the following
totals, which are not strictly accounting ones, and whose
definitions are as follows:
• Current Gross Operating Profit (EBITDA) includes added value,
administrative and sales expenses, costs of pensions including
contributions to provisions for pension commitments and
the cost of remuneration in shares. It does not include
other contributions and write-offs from depreciation and
provisions.
• Current Operating Profit (EBIT) includes Current Gross
Operating Profit (EBITDA) as well as other contributions and
write-offs to depreciation and provisions.
• Operating Profit includes EBIT, other non-recurring operating
income and expenses. These non-recurring items are strictly
defined as income and expenses resulting from events or
transactions that are clearly distinct from the company’s
ordinary activities, and that are not expected to reoccur on a
regular basis, owing to:
– their unusual nature and
– their randomoccurrence, suchas expensesor compensation
received for losses, costs resulting from shutdowns,
restructurings, or site relocations, goodwill amortization,
and capital gains and losses on the sale of non-operating,
tangible and intangible assets.
2.2.19.1 SALE OF GOODS AND PROVISION OF SERVICES
Income from the sale of goods is recognized in the income
statement when the significant risks and advantages inherent
in ownership of the goods have been transferred to the buyer.
Sales revenues are shown after deduction of discounts. Sums
from royalties, patent fees and use of trademarks are posted
to sales revenues.
2.2.19.2 PAYMENTS FOR OPERATING LEASE CONTRACTS
Payments for operating leases are recognized as expenses on a
straight-line basis over the period of the lease.
2.2.19.3 PAYMENTS FOR FINANCE LEASE CONTRACTS
The minimum payments for finance leases, as described in
paragraph 2.2.8.2, are broken down into financial charges and
debt repayment. The financial charge is applied for each period
covered by the lease so as to have a constant, periodic interest
rate to apply to the declining balance.
2.2.19.4 COST OF FINANCE AND OTHER FINANCIAL CHARGES
AND INCOME
The cost of finance includes:
• Interest charges on loans calculated using the effective
interest rate method;
• Interest charges included in payments made for a finance
lease and calculated using the effective interest rate method,
• Interest income generated from short-term investments;
• Variations in fair value of financial instruments;
• Income from dividends of non-consolidated companies
is recognized in the income statement when the Group
becomes entitled to receive payments, i.e., in the case of
quoted securities, on the coupon date.
Other financial income and expenses mainly include exchange
profits and losses.
2.2.19.5 INCOME TAXES
Corporate income tax (debit or credit) includes the tax to pay
(the tax credit) in respect of each financial year and the amount
of deferred taxation to pay (credit). The tax is recognized as
income, except if it relates to items that are directly recognized
as equity; in which case it is recognized as equity.
Deferred taxation is calculated using the variable carry forward
method for all timing differences at year-end between
taxable and accounting values of assets and liabilities on the
consolidated balance sheet. Fiscally non-deductible goodwill
does not give rise to a declaration of deferred tax.
Deferred tax assets are only recognized if their recovery is
probable. Deferred tax debits and credits are measured at the
tax rates that will be applicable when the timing differences
are settled.
The examination of the recoverability of brought forward losses
is subject to particular scrutiny and shall only be recoverable if
the subsidiary in question or its consolidation scope makes
profits in the near future.
Regarding French companies, pursuant to the removal of the
professional tax and its replacement by the CET and CVAE as
of 2010, the Group has decided to consider the CVAE in the
context of the IAS 12 standard. This decision will thus lead to
the posting of this tax as "Taxes" in the income statement.
2.2.19.6 EARNINGS PER SHARE
Net earnings per share (before dilution) are calculated on the
ratio between the net profit for the period and the weighted
number of shares in circulation during the period, after
deduction of shares held by the Group (treasury shares). Net
diluted earnings per share are calculated by including financial
instruments that provide deferred access to the Group’s capital
(stock options, share warrants).
