Saint Gobain - Registration document 2016

9 FINANCIAL AND ACCOUNTING INFORMATION 1. 2016 Consolidated Financial Statements

1.2

Estimates and assumptions

The main estimates and assumptions described in these notes concern the measurement of employee benefit obligations and share-based payments (Note 4 “Employees, personnel expenses and employee benefit obligations”), asset impairment tests (Note 5 “Property, plant and equipment and intangible assets”), provisions for other liabilities and charges measurement of financial instruments (Note 8 “Financing and financial instruments”) and deferred taxes (Note 10 “Taxes”). (Note 7 “Other current and non-current liabilities and provisions, contingent liabilities and litigation”), the

estimates and assumptions that affect the amounts of assets and liabilities reported in the balance sheet and the disclosure compliance with IFRS requires management to make of contingent assets and liabilities in the notes to the financial statements, as well as the reported amounts of income and The preparation of consolidated financial statements in expenses during the period. These estimates and assumptions are based on past experience and on various other factors through the use of these estimates and assumptions. performance. Actual amounts may differ from those obtained seen in the prevailing economic and financial environment, which makes it difficult to predict future business

NOTE 2

SCOPE OF CONSOLIDATION

2.1

Accounting principles related

recognition of the corresponding goodwill on the entire interest (previous and new acquisitions). When the Group disposes of a portion of an equity interest leading to the loss of control (but retains a minority interest), with recognition of any resulting gain or loss in the consolidated financial statements, and (ii) as an acquisition of the transaction is also treated as both a disposal and an acquisition, as follows: (i) as a disposal of the entire interest, Potential voting rights and share purchase commitments b) Potential voting rights conferred by call options on minority interests are taken into account in determining whether the control. Group exclusively controls an entity only when the Group has When calculating its percentage interest in controlled This approach gives rise to the recognition in the financial statements of an investment-related liability, included within companies, the Group considers the impact of cross put and call options on minority interests in the companies concerned. option, with a corresponding reduction in minority interests other provisions and non-current liabilities, corresponding to the present value of the estimated exercise price of the put recognized by adjusting equity. and equity attributable to equity holders of the parent. Any subsequent changes in the fair value of the liability are shareholder category (single economic entity approach). As a result, changes in minority interests with no loss of control Under IFRS 10, minority interests (referred to as “non-controlling interests” in IFRS 3R) are considered as a continue to be recorded in the statement of changes in equity and have no impact on the income statement or balance sheet, except for changes in cash and cash equivalents. Non-current assets and liabilities held 2.1.3 for sale – Discontinued operations Assets and liabilities that are immediately available for sale and for which a sale is highly probable are classified as non-current assets and liabilities held for sale. When several assets are held for sale in a single transaction, they are accounted for as a disposal group, which also includes any liabilities directly associated with those assets. The assets or a minority interest, measured at fair value. Minority interests c)

to consolidation The Group’s consolidated financial statements include the accounts of Compagnie de Saint-Gobain and of all companies significant influence. controlled by the Group, as well as those of jointly controlled companies and companies over which the Group exercises

Consolidation methods 2.1.1 Full consolidation a)

either directly or indirectly, are fully consolidated. Companies over which the Group exercises exclusive control, Joint arrangements b) are accounted for by the equity method. Balance sheet and income statement items relating to joint arrangements that Joint arrangements that meet the definition of joint ventures Group. meet the definition of joint operations are consolidated line-by-line based on the amount actually contributed by the method. Companies over which the Group directly or indirectly exercises significant influence are accounted for by the equity The Group’s share of the income of equity-accounted companies is shown on two separate lines of the income statement. The income of equity-accounted companies whose main business activity is in keeping with the Group’s core operational business is presented in business income under “Share in net income of core business equity-accounted companies” while the income of other equity-accounted companies is shown under “Share in net income of non-core business equity-accounted companies” in pre-tax income. Equity accounting c)

Business combinations 2.1.2 Step acquisitions and partial disposals a)

a step acquisition (an acquisition in stages), as follows: (i) as a disposal of the previously-held interest, with recognition of When the Group acquires control of an entity in which it already holds an equity interest, the transaction is treated as any resulting gain or loss in the consolidated financial statements, and (ii) as an acquisition of all of the shares, with

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016

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