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147
2014 Registration Document
Consolidated Financial Statements Year ended December 31, 2014
5
Notes to the Consolidated statements
2.4
TRANSLATION OF THE FINANCIAL STATEMENTS OF FOREIGN OPERATIONS
The Consolidated Financial Statements are presented in euros.
An entity’s functional currency is the currency of the primary economic
environment in which the entity operates. The functional currency of
Group entities is the currency of their home country.
The Financial Statements of entities whose functional currency is not
the euro and is not the currency of a hyperinflationary economy are
translated into euros as follows:
■
assets and liabilities are translated at the period-end closing rate;
■
income and expenses are translated at the weighted average exchange
rate for the period;
■
all resulting exchange differences are recognized in other comprehensive
income and are taken into account in the calculation of any gain or
loss realized on the subsequent disposal of the foreign operation;
■
items in the statement of cash flows are translated at the average
rate for the period unless the rate on the transaction date is materially
different.
No Group companies operated in a hyperinflationary economy in either
2014 or 2013.
2.5
TRANSLATION OF FOREIGN CURRENCY TRANSACTIONS
Transactions by Group entities in a currency other than their functional
currency are initially translated at the exchange rate on the transaction
date.
At each period-end, monetary assets and liabilities denominated in foreign
currency are translated at the period-end closing rate and the resulting
exchange gain or loss is recorded in the income statement.
Intra-group loans to certain foreign operations are treated as part of
the net investment in that operation if settlement of the loan is neither
planned nor likely to occur. The gain or loss arising from translation of
the loan at each successive period-end is recorded directly in other
comprehensive income in accordance with IAS 21.
2.6
INTANGIBLE ASSETS AND PROPERTY AND EQUIPMENT
2.6.1 GOODWILL
In accordance with IAS 36 –
Impairment of Assets
, goodwill recognized
on business combinations is not amortized but is tested for impairment
every year, at December 31.
Additional tests are performed at interim period-ends when there is an
indication that it may be impaired. The main impairment indicators used
by the Group are as follows:
■
internal impairment indicator: a material deterioration in the ratio of
recurring operating income before depreciation, amortization and
provision expense to net revenues excluding gasoline between the
budget and the most recent forecast;
■
external impairment indicator: a material increase in the discount rate
and/or a severe downgrade in the IMF’s GDP growth forecast.
Impairment losses recognized on goodwill are irreversible, including
those recorded at an interim period-end.
Impairment methods are described in Note 2.6.4 “Impairment tests”.
2.6.2 OTHER INTANGIBLE ASSETS
Other intangible assets consist mainly of software, which is amortized
by the straight-line method over periods ranging from one to eight years,
and of other intangible assets associated with stores.
2.6.3 PROPERTY AND EQUIPMENT
In accordance with IAS 16 –
Property, Plant and Equipment,
land,
buildings and equipment are stated at cost less accumulated depreciation
and any accumulated impairment losses. Borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying
asset (defined in IAS 23 –
Borrowing Costs
as an asset that necessarily
takes a substantial period of time to get ready for its intended use or
sale), are capitalized as part of the cost of the asset.
Assets under construction are recognized at cost less any identified
impairment losses.
Depreciation of property and equipment begins when the asset is available
for use and ends when the asset is sold, scrapped or reclassified as
held for sale in accordance with IFRS 5.
Property and equipment, or each significant part of an item of property or
equipment, are depreciated by the straight-line method over the following
estimated useful lives:
Buildings
Building
Site improvements
Car parks
40 years
10 to 20 years
6 to 10 years
Equipment, fixtures and fittings
4 to 8 years
Other
3 to 10 years