Carrefour - 2017 Registration Document

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 Notes to the Consolidated Financial Statements 2017 REGISTRATION DOCUMENT | CARREFOUR 5. 256 Number of employees, employee compensation and benefits Note 10 Accounting principles Group employees receive short-term benefits (such as paid vacation, paid sick leave and statutory profit-sharing bonuses), long-term benefits (such as long-service awards and 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. services) are classified as current liabilities (under “Other payables”) and recorded as an expense for the year in which the employees render the related services (Note 5.2.2). Post-employment benefits and other long-term benefits are measured and recognised as described in Note 10.1. All of these benefits are accounted for in accordance with IAS 19 – Employee Benefits. Short-term benefits (i.e., benefits expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related Two types of share-based payment plans have been set up for management and selected employees – stock option plans and performance share plans. These plans fall within the scope of IFRS 2 – Share-based Payment and are accounted for as described in Note 10.2. Pension and other post-employment benefits 10.1 Accounting principles Post-employment benefits are employee benefits that are payable after the completion of employment. The Group’s post-employment benefit plans include both defined contribution plans and defined benefit plans. 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. Defined benefit and long-term benefit plans A liability is recognised 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, staff turnover and the discount rate. 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. The net liability recorded for defined benefit plans corresponds to the present value of the defined benefit obligation less the fair value of plan assets (if any). The cost recognised in the income statement comprises: current service cost, past service cost and the gain or loss on ● plan amendments or settlements (if any), recorded in operating expense; interest expense on the defined benefit liability, net of interest ● income on the plan assets, recorded in net financial expense. Remeasurements of the net defined benefit liability (comprising actuarial gains and losses, the return on plan assets and any change in the effect of the asset ceiling) are recognised immediately in “Other comprehensive income”. Description of the main defined benefit plans 10.1.1 The main defined benefit plans concern supplementary pension benefits paid annually in some countries to retired employees of the Group, and length-of-service awards provided for in collective bargaining agreements that are paid to employees upon retirement. The plans, which are presented below, mainly concern France, Belgium and Italy. French plans Group employees in France are entitled to a length-of-service award when they retire, determined in accordance with the law and the applicable collective bargaining agreement. The award is measured as a multiple of the individual’s monthly salary for the last 12 months before retirement, determined by reference to his or her years of service.