technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS GOODWILL, INTANGIBLE & TANGIBLE ASSETS

3.3.3

OTHER INCOME (EXPENSES)

Other operating income (expense) is defined under gains and losses on disposals of fully consolidated companies, Recommendation 2013-03 of the French CNC relating to the incurred or estimated costs related to major litigation, as well as items format of consolidated financial statements prepared under in connection with Revised IFRS 3 and Revised IAS 27 such as international accounting standards, and comprises significant items acquisition costs related to business combinations and changes in that, because of their exceptional nature, cannot be viewed as earn-outs related to business combinations. inherent to Technicolor’s current activities. These mainly include

Year ended December 31, 2019

2018

(in million euros)

Capital gains and losses Litigations and others

(17)

1

(2)

(25) (24)

OTHER INCOME (EXPENSE)

(15)

In 2019, the other expenses mainly include a loss on a small business disposal from the Connected Home Business. In 2018, the other expenses mainly included litigations with customers and vendors within Connected Home segment for €9 million and Production Services segment for €4 million, as well as a €5 million provision in the DVD Services Division.

Goodwill, intangible & tangible assets

NOTE 4

Goodwill

4.1

Business combinations are accounted for using the acquisition method at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus • the recognized amount of any previously owned non-controlling • interests in the acquiree; plus if the business combination is achieved in stages, the fair value of • the pre-existing equity interest in the acquiree; less the net recognized amount (generally fair value) of the identifiable • assets acquired and liabilities assumed. Under option, for each business combination, any non-controlling interest in the acquiree is measured either at fair value (thus increasing the goodwill) or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Once

control is achieved, further acquisition of non-controlling interest or disposal of equity interest without losing control are accounted as equity transaction. Goodwill is recognized in the currency of the acquired subsidiary/associate and measured at cost less accumulated impairment losses and translated into euros at the rate effective at the end of the period. Goodwill is not amortized but is tested annually for impairment. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination, are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss, except if contingent consideration is classified in equity.

6

217

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019