Econocom - 2020 annual report

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 ot her operating income and expenses, as appropriate. Government grants are only recognised when the Group is certain to collect them. In accordance with IAS 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 depreciationexpense is recognisedon the depreciableasset covered by the grant, with the deferred income recognised in liabilities. Grants related to income are recognised to offset the costs that theyare intended tocover. In 2020, the Group benefited from various subsidies aimed at limiting the cost of

its unoccupiedresourcesdue to the Covid-19 crisis. The net cost of these subsidies is recognisedas indicated in section 2.5. Tax credits equivalent to subsidies 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 20 – Accounting for Government Grants and Disclosure of Government Assistance and included within profit (loss) from operating activities; in all other cases it is recognised within • income tax. French tax credits known as the Crédit d’Impôt Recherche (CIR) are recognised as government grants.

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

2020 2019 restated*

in € millions

(48.4) (31.3) (10.0)

(65.3) (34.3)

Fees paid to intermediaries and other professionals

Agents’ commissions

(11.3)

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

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

(37.9)

(45.8)

Total (156.7) In accordance with IFRS 5 (see 2.2.5), 2019 income and expenses of operations considered discontinued in 2020 * are reclassified to “Profit (loss) from discontinued operations” in the 2019 income statement. (127.7)

183

2020 annual report

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