Atos - Registration Document 2016

E Financial

E.4

Consolidated financial statements

Accounting estimates and judgments

Consolidationmethods Subsidiaries

contingent assets and liabilities at the closing date. The estimates, assumptions and judgments that may result in a significant adjustment to the carrying amounts of assets and liabilities are essentially related to: that affect the reported amounts of assets and liabilities, income and expense in the financial statements and disclosures of management to make judgments, estimates and assumptions The preparation of consolidated financial statements requires are determined based on value-in-use calculations or on their fair value reduced by the costs of sales. These calculations require the use of estimates as described in Note 11 Goodwill. The Group tests at least annually whether goodwill has suffered any impairment, in accordance with the accounting policies stated below. The recoverable amounts of cash generating units local specificities). taxable profits and utilizations of tax loss carry-forwards were prepared on the basis of profit and loss forecasts as included in the 3-year business plans (other durations may apply due to Deferred tax assets are recognized on tax loss carry-forwards when it is probable that taxable profit will be available against which the tax loss carry-forwards can be utilized. Estimates of Revenue recognition and associated costs on long-term contracts losses on completion are measured according to policies stated below. Total projected contract costs are based on various operational assumptions such as forecast volume or variance in the delivery costs that have a direct influence on the level of Revenue recognition and associated costs, including forecast revenue and possible forecast losses on completion that are recognized. investigations carried-out when appropriate. The estimation of pension liabilities, as well as valuations of plan assets requires the use of estimates and assumptions. The Group uses actuarial assumptions and methods to measure pension costs and provisions. The value of plan assets is determined based on valuations provided by the external custodians of pension funds and following complementary assumptions of renewal conditions of contract and on the discounted flows of these contracts. This asset is amortized on an estimation of its average life. backlog brought during a business combination is recognized as customer relationships. The value of this asset is based on An intangible asset related to the customer relationships and Goodwill impairment tests Measurement of recognized tax loss carry-forwards Pensions Customer relationships

Subsidiaries are entities controlled directly or indirectly by the Group. Control is defined by the ability to govern the financial and operating policies generally, but not systematically, combined with a shareholding of more than 50 percent of the voting rights. The existence and effect of potential voting rights consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. that are currently exercisable or convertible, the power to appoint the majority of the members of the governing bodies and the existence of veto rights are considered when assessing whether the Group controls another entity. Subsidiaries are fully strategic decisions. of the operating segments, has been identified as the company CEO and Chairman of the Board of Directors who makes reconciled to Group profit or loss. The chief operating decision maker assesses segments profit or loss using a measure of operating profit. The chief operating decision maker, who is responsible for allocating resources and assessing performance According to IFRS 8, reported operating segments profits are based on internal management reporting information that is regularly reviewed by the chief operating decision maker, and is The internal management reporting is built on two axes: Global Business Units and Divisions (Business & Platform Solutions (B&PS), Infrastructure & Data Management (IDM), Big Data & Cybersecurity (BDS), Worldline). Global Business Units have been determined by the Group as key indicators by the Chief operating decision maker. As a result and for IFRS 8 requirements, the Group discloses Global Business Units as operating segments. aggregation of several geographical areas - except for the Worldline activities which contains one or several countries, A Business Unit is defined as a geographical area or the without taking into consideration the activities exercised within each country. Each Business Unit is managed by dedicated members of the Executive Committee. reporting under IFRS 8 are the same as those used in its financial statements. Corporate entities are not presented as an operating segment. Therefore, their financial statements are used as a reconciling item (refer Note 2 of the financial The measurement policies that the Group uses for segmental headquarters. Shared assets such as the European mainframe are allocated to the Business Unit where they are physically located even though they are used by several Business Units. statements). Corporate assets which are not directly attributable to the business activities of any operating segments are not allocated to a segment, which primarily applies to the Group’s Segment reporting

E

Atos | Registration Document 2016

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