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2.2.15
I
Debt
Interest-bearing loans are initially recognized at their fair value
less costs attributable to the transaction. They are then measured
at depreciated cost; the difference between the cost and the
repayment value is recognized in the income statement for the period
of the loans, in accordance with the effective rate of interest method.
2.2.16
I
Trade and other accounts payable
Trade and other accounts payable are valued at fair value at first
recognition, and then at depreciated cost. When the maturity of
such financial assets is short, the sums obtained from applying this
method are very close to the nominal value of the payables, which is
then the value employed.
2.2.17
I
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.
2.2.18
I
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 on current transactions)
includes operating income from which consumption, other
purchases and external expenses, taxes and payroll expenses are
deducted. It does not include contributions and write-offs from
depreciation and provisions;
■■
current Operating Profit (EBIT on current transactions) includes
Current Gross Operating Profit (EBITDA) as well as contributions
and write-offs from depreciation and provisions;
■■
operating Profit includes EBIT before non-curent transactions
and 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 random occurrence, such as expenses or 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.
2.2.18.1 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.
2.2.18.2 Payments for operating lease contracts
Payments for operating leases are recognized as expenses on a
straight-line basis over the period of the lease.
2.2.18.3 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.
2.2.18.4 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 current 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.
2.2.18.5 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.
A deferred tax asset on loss carry-forwards is recognized only insofar
as it is likely that the relevant subsidiary or its tax consolidation
scope will have future taxable profits to which tax loss carryforwards
can be attributed.
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.
41
LISI 2017 FINANCIAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
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