AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES Notes to the financial statements

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

2.3 Principal acquisitions The Group applies IFRSǾ3 (revised version) to the identified assets acquired and liabilities assumed as a result of business combinations. The acquisition of an asset or a group of assets that do not constitute a business combination is recognized under the standards applicable to these assets (IASǾ38, IASǾ16 and IASǾ39). Since the revised IFRSǾ3 become mandatory on 1ǾJanuary 2010, the Group has applied the following principles: ● transaction costs are immediately recognized under Other Operating Expenses when they are incurred; ● for each business combination, the Group determines whether to opt for recognition of “full goodwill”, i.e. including the share of goodwill attributable to non-controlling interests at the acquisition date (measured at fair value), or for “partial goodwill”, which amounts to measuring the share of goodwill attributable to non-controlling interests in proportion to those interests’ share in the fair value of the identifiable net assets acquired; ● any potential price adjustment is estimated at its fair value on the acquisition date. This initial measurement can be adjusted subsequently with an entry as a counterpart to goodwill only where there is new information relating to circumstances existing at the acquisition date, and where such new measurement is made during the measurement period (12Ǿmonths). Any adjustment to the financial liability recognized after the measurement period in respect of earn- outs, where it does not meet these criteria, is recognized as a counterpart to the Group’s Comprehensive Income. All business combinations are recognized by applying the acquisition method, which consists of: ● measuring and recognizing at fair value at the acquisition date the identifiable assets acquired and liabilities assumed. The Group identifies and allocates these items on the basis of contractual provisions, economic conditions and its accounting and management principles and procedures; ● measuring and recognizing at the acquisition date the difference referred to as “goodwill” between: ● the sum of the purchase price for the company acquired plus the amount of any non-controlling interests in that entity,Ǿand ● the net amount of the recognized identifiable assets acquired and liabilities assumed. The acquisition date is the date on which the Group effectively obtains control of the company acquired.

The purchase price of the acquiree corresponds to the fair value, at the acquisition date, of the elements of consideration remitted to the seller in exchange for control of the acquiree, to the exclusion of any element serving as consideration for any transaction separate from the attainment of control. If the initial accounting for a business combination can only be determined provisionally for the reporting period in which the combination was effected, the acquirer recognizes the combination using provisional values. The acquirer must then recognize adjustments to these provisional values related to the completion of initial accounting within 12Ǿmonths of the acquisition date. Newly-consolidated entities On 22ǾFebruary 2017, Axway Software, through its subsidiary Axway Inc. acquired 100% of shares of the company Syncplicity LLC in the United States. Syncplicity LLC owns 100% of the shares in its subsidiary: Syncplicity International Limited in Ireland. Deconsolidated entities InǾ2017, the Group put into liquidation Systar Limited in the UK, Appcelerator GmbH in Germany and Axway Software Sdn Bhd in Malaysia. These companies were deconsolidated inǾ2017. The subsidiaries Systar Inc in the United States, Appcelerator UK in the UK and Appcelerator Singapore in Singapore were also liquidated. These companies were deconsolidated inǾ2017. Syncplicity GmbH in Germany, held by Syncplicity LLC, was liquidated before the acquisition on 22ǾFebruary 2017, and it was deconsolidated. 2.4 Other changes in scope

2.5 Comparability of the financial statements

Two new legal entities have a limited impact on the consolidated financial statements at 31ǾDecember 2017: Syncplicity LLC in the United States and Syncplicity International Limited in Ireland, with total revenue of less than €15Ǿmillion. Given the absence of any material impact on the consolidated financial statements (revenue below €15Ǿmillion, equivalent to 5% of Group revenue), no pro forma financial information has been supplied.

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AXWAY - 2017 REGISTRATION DOCUMENT

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