Pending an IFRIC interpretation or a specific IFRS standard on this matter, the following accounting treatment has been adopted in accordance with currently applicable IFRS standards and the AMF recommendation:
The exclusive takeover leads to the recognition of a disposal gain or loss calculated on the entire interest at the transaction date. The previously held interest is thus remeasured at fair value through the income statement at the time of the exclusive takeover.
When additional securities are acquired in an entity that is already exclusively controlled, the difference between the acquisition price of these securities and the proportion of additional consolidated equity acquired is recognized as equity attributable to shareholders of the parent company of the Group. The consolidated value of the subsidiary’s identifiable assets and liabilities, including goodwill, is thus left unchanged.
In the statement of cash flows, acquisitions of additional securities in an entity already controlled are presented as net cash flows relating to financing activities.
In the event of a partial sale of securities in an exclusively controlled entity that does not modify control of this entity, the difference between the fair value of the sale price of the securities and the proportion of consolidated equity capital that these securities represent at the date of sale is recognized as equity attributable to shareholders in the parent company of the Group. The consolidated value of the subsidiary’s identifiable assets and liabilities, including goodwill, is thus left unchanged.
In the statement of cash flows, sales of securities without loss of exclusive control are presented as net cash flows relating to financing activities.
The loss of exclusive control leads to the recognition of a disposal gain or loss calculated on the entire interest held at the transaction date.
Any residual interest is therefore remeasured at fair value through the income statement at the time of the exclusive loss of control.
In application of IFRS 5 “Non‑current assets held for sale and discontinued operations,” the assets and liabilities of controlled entities held for sale are presented separately on the balance sheet.
Reclassified non‑current assets are no longer depreciated from the date on which they are reclassified.
When a takeover takes place in a single transaction, goodwill is equal to the fair value of the consideration paid to acquire the securities (including any earn‑out payments which are recorded at fair value at the takeover date), plus the value of non‑controlling interests (these items are valued for each business combination either at fair value or at the proportionate share of the fair value of the net assets of the acquired business and minus the fair value of assets, liabilities and contingent liabilities identified at the acquisition date).
Goodwill recorded in the balance sheet is subject to impairment tests on at least an annual basis and whenever there is an indication of impairment. Impairment tests are performed for the cash‑generating unit(s) to which goodwill has been allocated by comparing the recoverable amount and the carrying amount of the cash‑generating unit or group of cash‑generating units. The Group considers that the cash‑generating unit or the group of cash‑generating units are mainly the ten key markets in which the Group operates: United States, Canada, United Kingdom, France, DACH (Germany, Austria and Switzerland), Asia‑Pacific the Middle‑East and Africa, Central and Eastern Europe, Western Europe, Latin America.
The recoverable amount of a cash‑generating unit is the greater of its fair value (generally its market value), net of disposal costs, and its value in use. Value in use is determined on the basis of discounted future cash flows or using the market multiples approach. Calculations are based on five‑year cash flow forecasts, a terminal growth rate for subsequent cash flows and the application of a discount rate to all future flows. The discount rates used reflect the current market assessments of the time value of money and the specific risks to which the cash‑generating unit is exposed. In addition, these rates take into account lease liabilities when estimating the debt‑to‑equity ratio.
If the carrying amount of a cash‑generating unit is higher than its recoverable amount, the assets of the cash‑generating unit are written down to their recoverable amount. Impairment losses are allocated, firstly, to goodwill and are recognized through the income statement and then against other assets.
