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188 2014 Registration Document
Consolidated Financial Statements Year ended December 31, 2014
5
Notes to the Consolidated statements
30.5
MEASUREMENT OF THE DEFINED BENEFIT OBLIGATION
Obligation
(in € millions)
France
Belgium
Italy Other countries Group total
Provision
859
227
150
37
1,272
Fair value of plan assets
108
92
0
4
204
Defined Benefit Obligation
(DBO) at December 31, 2013
966
319
150
41
1,475
Provision
987
261
153
23
1,425
Fair value of plan assets
93
89
0
6
188
Defined Benefit Obligation
(DBO) at December 31, 2014
1,080
350
153
30
1,613
30.6
ACTUARIAL ASSUMPTIONS AND SENSITIVITY ANALYSIS
The assumptions used to measure defined benefit obligations for length-of-service awards are as follows:
2014
2013
Retirement age
60-65
60-65
Rate of future salary increases
2.1% to 3.0% 2.0% to 3.0%
Inflation rate
1.9%
2%
Discount rate
1.5% to 1.9% 2.7% to 3.2%
Projected benefit obligations were calculated using a discount rate of
1.90% (2013: 3.20%) for the French and Belgian plans and 1.50%
(2013: 2.70%) for the Italian plan. These rates are based on an index
of AA-rated corporate bonds with maturities similar to the estimated
duration of the defined benefit obligation.
The average duration of the defined benefit obligation under French,
Belgian and Italian plans is 11.5 years, 10.4 years and 11 years
respectively.
Sensitivity tests show that a 25-bps increase in the discount rate would
have a negative impact of around €43 million on the defined benefit
obligation under the French, Belgian and Italian plans.
The tests also show that a 25-bps increase in the inflation rate would
have an impact of around €8 million on the defined benefit obligation
under the French, Belgian and Italian plans.
Note 31
Claims and litigation
In the normal course of its operations in around a dozen different countries, the Group is involved in tax, employee-related and commercial disputes
and legal proceedings.
31.1
TAX REASSESSMENTS
Certain Group companies have been or are currently the subject of tax
audits conducted by their local tax authorities.
In Brazil, Carrefour is subject to tax audits covering, in particular, the tax
on the distribution of goods and services (ICMS), related tax credits
(determination of the amounts claimable and documentation of the claims),
and federal contributions to the social integration program and to the
financing of the social security system (Pis-Cofins). The Group has
challenged most of the reassessments, particularly the constitutionality
of certain legislative provisions on which they are based. The estimated
risk in each case is reviewed regularly with Carrefour Brazil’s advisors
and an appropriate provision is recorded.
In Argentina, the tax authorities have challenged Carrefour’s omission of
certain categories of supplier rebates from the basis for calculating sales
tax. Total reassessment notified for the period 1996-2004 amounted to
ARS 580 million (approximately €57 million). The Group has contested the
tax authorities’ interpretation. The estimated risk is reviewed regularly with
Carrefour Argentina’s advisors and an appropriate provision is recorded.