TELEPERFORMANCE_Registration_document_2017

CONSOLIDATED FINANCIAL STATEMENTS

7.6 Notes to the consolidated financial statements

B. Scope of consolidation

NOTE B.1 Accounting policies and methods

B.1.1 Basis of consolidation

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated into euros using the exchange rate at the reporting date. The income and expenses of foreign operations are translated into euros using the average foreign exchange rate of the period, unless the exchange rate has fluctuated significantly. Foreign exchange differences resulting from translations are recognized in the translation reserve, as a separate equity component. The Company has no foreign operations in any country defined by the IASB as a hyperinflationary economy. Net investment in foreign operations Foreign exchange differences arising from the translation of a net investment in foreign operations and of related hedges are recognized in the translation reserve. They are recognized in profit or loss on disposal of the foreign operations. B.1.3 Business combinations Following changes to IFRSb3band IASb27bin 2008, the Group modified its accounting for business combinations and purchases of and purchase commitments on non-controlling interests for acquisitions after Decemberb31 st , 2009. Since Januaryb 1 st , 2010, the Group has applied revised IFRSb3bprospectively. A business combination may therefore be recognized, at the election of the Group, according to either of the following two options set out in IFRSb3R: ■ measurement of non-controlling interests as the proportionate interest in identifiable assets and liabilities; ■ measurement of non-controlling interests at fair value (the full goodwill method). The Group has elected to measure non-controlling interests as the proportionate interest in identifiable assets and liabilities for its acquisitions made since 2010. Should the Group give a put option to minority shareholders at the time that control is transferred, a financial liability is recognized for the current value of the commitment, with an equivalent reduction in equity. Subsequent changes in fair value of the liability are recognized directly in equity. Since 2010, transaction costs, other than those concerning the issue of debt or equity that the Group incurs in connection with a business combination, are expensed as incurred.

Subsidiaries Subsidiaries are entities controlled by the Company. Control exists when it is exposed, or has the rights, to variable returns from its involvement with an entity and has the ability to affect those returns through its power over it. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Associates The Company holds no entity in which the Group has significant influence, but not control, over the financial and operating policies. Transactions eliminated in the consolidated financial statements Balances, any unrealized gains and losses, and income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. B.1.2 Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchange rate at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into euros at the foreign exchange rate at that date. Foreign exchange differences arising on translation are recognized as financial income or expenses. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated using the exchange rate at the date the fair value was determined. Financial statements of foreign operations The functional currency of a foreign operation outside the euro zone is in general its local currency except in certain cases where most of its financial flows are realized with reference to another currency.

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Teleperformance bb - bb Registration documentbb 2017