Econocom - 2019 Universal registration document

06 consolidated financial statements

notes to the consolidated financial statements

Government grants 4.3. Government grants are recognised as a deduction from costs ( e.g., wages and salaries), or within other operating income and expenses, as appropriate. Government grants are only recognised when the Group is certain to collect them. In accordance with IAS ژ 20, the Group applies different accounting treatment for grants related to assets (or investment subsidies) and grants related to income. Grants related to assets are recognised in profit or loss over the periods in which the Group expenses the costs that the grants are intended to compensate. In practice, they are recognised over the periods and in the proportions in which depreciation expense is recognised on the depreciable asset covered by the grant, with the deferred income recognised in liabilities. Grants related to income are recognised to offset the costs that they are intended to cover.

Tax credits treated as research grants and competitive and employment for 2018 tax credits Tax credits are accounted for depending on the tax treatment applicable in each country: if the tax credit is only calculated based • on specific expenses, does not adjust the calculation of the subsidiary’s taxable profit, is not limited by the tax liability of the subsidiary, and may be refunded in cash, it is treated as a grant within the meaning of IAS ژ 20 – Accounting for Government Grants and Disclosure of Government Assistance and included within operating profit; in all other cases it is recognised within • income tax. The French research tax credits (CIR) and employment and competitiveness tax credits for 2018 are accounted for as government grants.

External expenses 4.4. The following table presents a breakdown of external expenses:

2019 2018 restated*

in € ڳ millions

(65.5)

(61.1)

Fees paid to intermediaries and other professionals

(11.2)

(37.2) (33.9)

External services (rent, maintenance, insurance, etc.)**

(34.3)

Agents’ commissions

Other external expenses (subcontracting, public relations, transport, etc.)

(47.0)

(54.8)

Total

(158.1)

(187.0)

Following the application of IFRS ژ 5 (see 2.2.5.). * The change in this item came from the introduction on 1 ژ January 2019 of IFRS ژ 16 on Leases (see 1.1.1.1) for an ** amount of €26.9 million in 2019.

181

2019 annual report