Econocom - 2020 annual report

06 consolidated financial statements

notes to the consolidated financial statements

CHANGES IN PRESENTATION 1.2.2. AND ACCOUNTING POLICIES Outside the standards, amendments, interpretations adopted by the European Union and applicable on 1 January 2020, the Group has not made any changes in accounting policies. USE OF ESTIMATES 1.2.3. AND JUDGEMENTS The preparation of Econocom group’s consolidated financial statements requires the use of estimates and assumptions by Management which may affect the book value of certain items in assets and liabilities, income and expenses, and the information disclosed in the notes to the consolidated financial statements. Estimates and assumptions are made on the basis of past experience and other elements considered realistic or reasonable, and are a basis for the exercise of judgment in determining the book value of assets and liabilities. The Group uses discount rate assumptions (based on market data) to estimate assets and liabilities. Group Management regularly reviews its estimates and assumptions in order to ensure that they accurately reflect both past experience and the current economic situation. Depending on changes in these assumptions, the items in its financial statements could differ significantly, which would affect the value of assets, liabilities, equity or the income statement. The impact of changes in accounting estimates is recognisedin the period in which the change occurred andall future affectedperiods. The main estimates and assumptions used by the Group are set out in the relevant

sections in the notes to the financial statements andcover: the valuation and useful lives of operating • assets, property, plant and equipment, intangible assets and goodwill and any counterparties thereof; the amount of provisions for risks and other • provisionsrelated to theactivity as well as; the assumptionsused to calculateemployee • benefit obligationasndsharebasedpayments; the valuation of the Group’s residual • interests in leasedassets; the amounts of deferred tax assets and • liabilities aswell as thecurrent tax expense; the valuation methods for identifiable • assets and liabilities acquired as part of business combinations; determining the fair value of financial • instruments. For these estimates, the Group applies the following accounting policies: impairment of goodwill (note 9.3): each • year, the Group reviews the value of the goodwill in its consolidated financial statements. These impairment tests are particularly sensitive to medium-term financial projections and to the discount rates used to estimate the value in use of CGUs; provisions (note 16): provisions are • recognised to cover probable outflows of resources to a third party with no equivalent consideration for the Group. They include provisions for litigation of any nature which are estimated on the basis of the most probable, conservative settlement assumptions. To determine these assumptions, Group Management relies, where necessary, on assessments made by external consultants;

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2020 annual report