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152 2014 Registration Document
Consolidated Financial Statements Year ended December 31, 2014
5
Notes to the Consolidated statements
2.11
PROVISIONS
In accordance with IAS 37 –
Provisions, Contingent Liabilities and
Contingent Assets
, a provision is recorded when, at the period-end,
the Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount of
the provision is estimated based on the nature of the obligation and the
most probable assumptions. Provisions are discounted when the effect
of the time value of money is material.
2.12
EMPLOYEE BENEFITS
Group employees receive short-term benefits (such as paid vacation, paid
sick leave, statutory profit-sharing bonuses), long-term benefits (such as
long-service awards, seniority bonuses) and post-employment benefits
(such as length-of-service awards and supplementary pension benefits).
Post-employment benefits may be paid under defined contribution or
defined benefit plans.
A)
DEFINED CONTRIBUTION PLANS
Defined contribution plans are post-employment benefit plans under
which the Group pays fixed contributions into a separate entity that is
responsible for the plan’s administrative and financial management as
well as for the payment of benefits, such that the Group has no obligation
to pay further contributions if the plan assets are insufficient. Examples
include government-sponsored pension schemes, defined contribution
supplementary pension plans and defined contribution pension funds.
The contributions are recorded as an expense for the period in which
they become due.
B)
DEFINED BENEFIT AND LONG-TERM
BENEFIT PLANS
A liability is recognized for defined benefit obligations that are determined
by reference to the plan participants’ years of service with the Group.
The defined benefit obligation is calculated annually using the projected
unit credit method, taking into account actuarial assumptions concerning
future salary levels, retirement age, mortality and staff turnover rates.
The discount rate corresponds to the interest rate observed at the period-
end for investment grade corporate bonds with a maturity close to that
of the defined benefit obligation. The calculations are performed by a
qualified actuary.
C)
SHARE-BASED PAYMENTS
Two types of share-based payment plans have been set up for management
and selected employees – stock option plans and stock grant plans.
As allowed under IFRS 1, upon first-time adoption of IFRS the Group
elected to apply IFRS 2 –
Share-based Payment
only to equity-settled
stock options granted after November 7, 2002 that had not yet vested
as of January 1, 2004. This had no impact on opening shareholders’
equity at January 1, 2004.
All subsequent share-based payment plans have been accounted for
in accordance with IFRS 2. As the plans are equity-settled, the benefit
represented by the share-based payment is recorded in employee benefits
expense with a corresponding increase in shareholders’ equity. The
amount recorded in employee benefits expense corresponds to the
recognition over the vesting period of the benefit’s fair value. Fair value is
the value determined using the Black & Scholes option pricing model at the
grant date in the case of options or the share price at the grant date in the
case of stock grants. In accordance with IFRS 2, performance conditions
that are not market conditions are not taken into account to estimate the
fair value of stock grants and stock options at the measurement date.
2.13
INCOME TAX EXPENSE
Income tax expense includes current taxes and deferred taxes.
Deferred taxes are calculated on all temporary differences between the
carrying amount of assets and liabilities and their tax basis (except in
the specific cases referred to in IAS 12), and carried-forward tax losses.
They are measured at the tax rates that are expected to apply to the period
when the asset will be realized or the liability will be settled, based on
tax rates and tax laws that have been enacted or substantively enacted
by the end of the reporting period.
Deferred tax assets and liabilities are not discounted and are classified
in the statement of financial position under “Non-current assets” and
“Non-current liabilities”.
The recoverability of deferred tax assets is assessed separately for each
tax entity, based on business plan estimates of future taxable profits and
the amount of deferred tax liabilities at the period-end.
A valuation allowance is recorded to write down deferred tax assets
whose recovery is not considered probable.
The CVAE local business tax in France, which is assessed on the basis
of the value-added generated by the business, is reported under income
tax expense because the Group considers that it meets the definition of
a tax on income contained in IAS 12.