Saint-Gobain // Universal Registration Document 2021

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Financial and accounting information Compagnie de Saint-Gobain 2021 annual financial statements (parent company)

The financial statements cover the 12-month period from January 1 to December 31, 2021. The following notes are an integral part of the annual financial statements. These financial statements were adopted on February 24, 2022 by the Board of Directors.

NOTE 1

Accounting principles and methods

Property, plant and equipment Property, plant and equipment are carried at acquisition cost (purchase price plus incidental expenses). They are depreciated over their estimated useful lives using the straight-line method. The most commonly used useful lives are as follows:

The financial statements of Compagnie de Saint-Gobain have been drawn up in accordance with the French Chart of Accounts, French law, and accounting principles generally accepted in France. The financial statements include the accounts of Compagnie de Saint-Gobain’s German branch. Change in the method for calculating certain retirement benefits In May 2021, the response of the International Financial Reporting Interpretations Committee (IFRIC) to a question raised concerning the method to be used to recognize benefit obligations under certain defined-benefit plans over various reporting periods, led the Group to revise the calculation method it had used since the outset to value this type of plan in France in its financial statements prepared under IFRS. For plans under which benefits are based on length of service and are conditional on the beneficiary being employed by the Company at the retirement date, the provision is recognized based on the vesting formula and over a period equal to the maximum years of service, rather than over the period representing the employee’s service to the Company. In accordance with the November 17, 2021 revision to ANC Recommendation no. 2013-02 issued by the French accounting standards-setter on November 7, 2013 regarding the rules for measuring and recognizing pension and other benefit obligations, the Company has also chosen to apply this accounting method in its financial statements prepared in accordance with French accounting principles. This change concerns retirement bonuses ( indemnités de fin de carrière ) and represents a change in accounting policy at January 1, 2021. Accordingly, at that date, Compagnie de Saint-Gobain reduced the provision for retirement bonuses by €226 thousand against an increase in retained earnings for the same amount. Intangible assets Intangible assets are carried at acquisition cost (including incidental expenses) and are amortized over their estimated useful lives, ranging from three to ten years.

Buildings ■

40 to 50 years Straight-line

12 years Straight-line

Improvements and additions ■

5 to 12 years Straight-line

Fixtures and fittings ■ Office furniture ■ Office equipment ■

10 years Straight-line 5 years Straight-line 4 years Straight-line 3 years Straight-line

Vehicles ■

IT equipment ■

Financial investments On initial recognition, investments in subsidiaries and affiliates are stated at cost including incidental expenses. Periodically, and particularly when an inventory is performed, the net carrying amount of the investments is compared with their fair value (value in use). Fair value is estimated based on various criteria: the Company’s equity in the underlying net assets, proportion of consolidated net assets, net present value of future cash flows, excluding interest expense but after tax, based on business plans (or long-term budget projections), or a multiple of a normative performance basis. When the fair value of the investments falls below their carrying amount, a provision is set aside for impairment. No unrealized capital gain is recorded if their fair value exceeds their carrying amount, and unrealized capital gains and losses are not offset. Treasury shares Treasury shares held by the Company for cancellation are recorded in the balance sheet under “Other investment securities”. They are carried at acquisition cost and are not revalued or provisioned. At December 31, 2021, treasury shares held by the Company for allocation upon exercise of stock options are recorded in the balance sheet under “Marketable securities”. Treasury shares held by the Company for allocation under performance share plans are also recorded in the balance sheet under “Marketable securities”. These shares are valued in accordance with the first in/first out (FIFO) method, and are not revalued or provisioned.

SAINT-GOBAIN UNIVERSAL REGISTRATION DOCUMENT 2021 342

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