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4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 6.Events and transactions outside the Group's ordinary activities
DANONE
REGISTRATION DOCUMENT 2015
103
Impacts on the consolidated financial statements
Accounting principles
Assets held for sale and their related liabilities
The groups that Danone intends to sell are classified as held for
sale when their value will be recovered mainly through their sale,
which is considered to be highly probable within the next 12 months,
rather than though their use.
The related assets and liabilities are measured at the lower of their
carrying amount and their fair value less costs to sell and they are
presented on separate lines in the consolidated balance sheet of
the period during which the decision to sell has been taken. The
consolidated balance sheets of earlier periods are not restated.
2014 fiscal year
As of December 31, 2014, the review of the recoverable amount
of the
Dumex
brand based on the principles described in Note 9.3
of the Notes to the consolidated financial statements for the year
ended December 31, 2014 resulted in a €249 million impairment
provision in respect of the
Dumex
brand recognized in Other ope-
rating income (expense).
2015 fiscal year
Following the sales agreement, the Group, thinking the sale would
take place during the next 12 months, classified the assets and
liabilities related to the Dumex activity in China as held for sale,
which resulted in:
•
a portion of the goodwill of the Early Life Nutrition Asia CGU
being allocated to Dumex China, pro rata to their recoverable
amount, (
i.e
. €71 million);
•
the assets being remeasured on the basis of the lower of the
carrying amount and the fair value in accordance with the terms
of the agreement less costs to sell and therefore an impairment
provision being booked in respect of the property, plant and
equipment and the
Dumex
brand in China relative to the year
ended December 31, 2014, recognized under the Other operating
income (expense) heading for the year;
•
the recognition of an impairment provision in respect of all of
the deferred tax assets recognized by Dumex in China during
earlier years;
•
the related assets and liabilities being presented respectively
in Assets held for sale and Liabilities directly associated with
assets classified as held for sale in the consolidated balance
sheet as of December 31, 2015. This concerns mainly goodwill
and brands totaling €155 million.
Summary of the impacts on the consolidated income statement
Year ended December 31
2014
2015
(in € millions)
Other operating
income (expense)
(a)
Tax
Other operating
income (expense)
(a)
Tax
Impairment of the
Dumex
brand
(249)
55
(318)
70
Impairment of property,
plant and equipment
−
−
(19)
−
Impairment of deferred tax assets
(b)
−
−
−
(42)
Total
(249)
55
(337)
28
(a) Since this was a major crisis affecting the Group's early life nutrition activity, the related costs have been recognized under the Other operating income
(expense) heading.
(b) Including €12 million relating to costs recognized in Other operating income (expense).
Legal and arbitration proceedings
Danone has reviewed its recourse and compensation options and decided to initiate proceedings in the New Zealand High Court, as well
as arbitration proceedings in Singapore to bring all facts to light and to obtain compensation for the harm it has suffered.
Proceedings are in progress.