Cash and cash equivalents include sight deposits, cash, short-term deposits with an initial maturity of less than three months, UCITS and money market funds with a negligible risk of a change in value, i.e. that meet the following criteria: sensitivity to interest rate risk less than or equal to 0.25 and 12-month historical volatility close to zero.
In the statement of cash flows, cash includes cash and cash equivalents as defined above, net of bank overdrafts.
If the Groupe buys back its own equity instruments, the amount of the consideration paid, including directly attributable costs, is deducted from equity. When treasury shares are sold or put back into circulation, the amount received is recognized as an increase in equity. The positive or negative balance of the transaction is presented in reserves and retained earnings.
The bonds are initially recognized at their fair value, which corresponds to the amount of cash received, net of issuance costs.
Subsequent to initial recognition, bonds are recognized at their amortized cost, using the effective interest rate method, which takes into account all issuance costs and any redemption premium or discount.
Provisions are funded when:
Contingent liabilities are not recognized but, if material, are disclosed in the notes, except in the case of business combinations where they constitute identifiable items for recognition.
Provisions for litigation and claims
These provisions concern identified risks related to litigation or claims of any kind: commercial, regulatory, tax (other than income taxes) or labor. The Groupe establishes a provision if it is likely that outflow will be necessary to eliminate this risk and it is possible to reliably estimate the cost related to this risk. In such cases, the amount of the provision (including any related penalties) is determined by the agencies and their experts, under the supervision of the Groupe’s head office teams, on the basis of their best estimate of the probable costs related to the litigation or the claim.
Restructuring provisions
A provision for restructuring is recognized when the Groupe has approved and announced a restructuring plan.
In the context of an acquisition, restructuring plans that do not constitute liabilities for the acquired company on the date of the acquisition are recognized as expenses.
These costs mainly include severance payments, early retirement payments, and the costs of unfulfilled notice periods recognized under personnel costs and, in some cases, as write-downs of property, plant and equipment and other assets.
Vacant property provisions
If a property is vacant and is not intended to be used in the main activity, a provision is recognized based on facility management expenses, taxes and any other costs. This provision does not include lease payments, which are recognized as an impairment of right-of-use assets related to leases.
In the context of business combinations, provisions are also recognized when the acquired company has real estate leases with terms less favorable than those prevailing in the market at the acquisition date.
The Groupe recognizes obligations relating to pensions and other post-employment benefits based on the type of plan:
