Universal Registration Document 2023

7. Parent Company 2023 Financial Statements - AFR

Marketable securities

Marketable securities primarily include treasury shares, which are classified according to their intended purpose.

A provision for liabilities is recognized for treasury shares allocated to stock option or free share plans in order to reflect the loss resulting from the difference between the subscription price (zero for the free shares) and their cost price.

A provision is recognized for treasury shares that are not allocated to such a plan as well as for other marketable securities, whenever their current value at year‑end is lower than their carrying amount. The current value of publicly traded securities equals the average quoted price for the final month of the financial year, and for non‑listed securities, the probable selling price.

Bonds

Bonds are recognized at their par value.

In cases where a redemption premium exists, the liability is increased by the total amount of such a premium. This premium is offset by the recognition of an asset, which is amortized over the life of the bond on an actuarial basis.

In cases where an issue premium exists, the liability is recognized at par value and the issue premium is recognized as an asset; the issue premium is amortized over the life of the bond.

Provisions for liabilities and charges

Provisions are funded when:

  • the Company has a present obligation (legal or constructive) resulting from a past event;
  • it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
  • the amount of the outflow can be estimated reliably.

Where the effect of the time value of money is material, provisions are discounted to present value. Increases in the amount of provisions resulting from the unwinding of the discount are recognized as financial expenses.

Contingent liabilities are not recognized but, if material, are disclosed in the Notes to the financial statements.

Financial instruments

In principle, the derivatives used by the Company are for hedging purposes only. The accounting treatment of these instruments is:

  • derivatives used to hedge foreign currency receivables, debts, loans or borrowings are revalued in the balance sheet in respect of their foreign currency component in order to reflect the symmetrical effect under “Unrealized currency translation– Gains/Losses” on the balance sheet;
  • realized gains and losses are recorded symmetrically on the hedged item.
Financial income (expense)

Financial income is recognized by applying the usual rules, namely:

  • dividends: on the date the distribution is approved by the General Shareholders’ Meeting;
  • financial income on current accounts, time deposits and bonds: as and when income is acquired;
  • interest and dividends on marketable securities: on the date of receipt.
Non recurring items

In general, these include capital gains and losses on the sale of property, plant and equipment, and intangible and financial assets.

Note 3 Revenue

Billings are mainly composed of:

  • rent received on the building at 133 avenue des Champs-Élysées in Paris, France;
  • services invoiced to Groupe companies.

Note 4 Reversal of provisions and expenses transfers

Expenses transfers mainly include re‑invoicing of Groupe companies for the allocation of free Publicis Groupe shares to certain key Groupe managers as part of free share or stock option plans.