NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Consolidated financial statements

4-3:

Tangible assets

4-3-1:

Accounting principles

Tangible fixed assets acquired separately are initially measured at acquisition cost in accordance with IAS 16. This cost includes expenses directly attributable to the acquisition of the asset. Tangible fixed assets acquired as part of a business combination are recognized at fair value on their acquisition date, separately from goodwill. The value of tangible assets is then reduced by the amount of accumulated depreciation and impairment losses. Demonstration equipment Demonstration equipment recognized under tangible fixed assets is depreciated using the straight line method over four years, which is generally considered to be their useful life. Spare parts Spare parts and maintenance parts that are used over more than one year or which can only be used with a fixed asset are recognized under tangible fixed assets and depreciated over their useful life. Rented equipment Rented franking machines other than IS-280 consist of two distinct components with different useful lives: a meter and a base. The depreciation periods, which correspond to the useful life of the asset in question, are as follows: IS-280: three years in North America and five years in • France;

The intra-Group margin generated by industrial subsidiaries on equipment sold to the distribution subsidiaries that rent this equipment is eliminated, and depreciation is recalculated on the basis of the new value thus obtained. Depreciation periods Depreciation uses the straight-line method and is over the useful life of the asset: lands and buildings: twenty to forty years; • equipment: five to ten years; • tools: three years; • office furniture: ten years; • research equipment: five years; • rented equipment: three, five or six years; • demonstration equipment: four years; • spare parts: four years; • refurbished machinery: three years. • Goods acquired under financing leases For finance lease contracts that transfer almost all of the risks and benefits of ownership to the Group, the fair value of the property (or the discounted value of minimum payments if lower) at the beginning of the contract is capitalized and depreciated over the asset’s useful life. Amounts included on the liabilities side of the balance sheet under financial debt represent the present value of remaining lease payments; this amount is reduced by the fraction of each rent paid.

• •

meter: five years;

base: six years, France only.

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REGISTRATION DOCUMENT 2017 / NEOPOST