technicolor - 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS Note 6 - Property, equipment and intangible assets

Property, equipment and intangible assets

NOTE 6

INTANGIBLE ASSETS Intangible assets consist mainly of capitalized IT development projects, the cost of software, trademarks and rights to use patents. Ongoing software development projects are classified under “Intangibles in progress”. Once development is achieved, the software is capitalized or delivered to the subsidiaries concerned. Software developed or used internally is amortized from the date

of use. Other IT development costs are capitalized and amortized on a straight-line basis over a maximum of three years, with some exceptions. Minor IT expenses are amortized over the financial year they are put in use. Software acquired or developed as well as licenses are amortized on a straight-line basis over the duration of their protection or over their useful life, whichever is shorter.

Intangible assets

Tangible assets

(in million euros)

At December 31, 2019, Net

7

- - - - - - - - -

Cost

20

Accumulated depreciation

(13)

Acquisitions

- -

Disposals (net of cumulated amortization) Depreciation and amortization AT DECEMBER 31, 2020, NET

(1)

6

Cost

20

Accumulated depreciation

(14)

Financial assets

NOTE 7

agreement is entered into as a guarantee of payment and/or repayment of the debt (see note 9.1) and will last until the debt is extinguished. The Company keep the control of the transferred assets, accordingly the transaction was carried out at net book value. The transferred fiduciary assets correspond to the shares of the subsidiary Gallo 8 SAS held by the Company less one share (78,354,499 shares of nominal value of €10 each) valued at their net book value in the accounts of Technicolor SA on the date of signature of the trust contract, i.e. €693 million (gross value of €1,444 million, depreciation of €750 million). The results of the trust are therefore made up of the income and expenses related to the holding of the subsidiary Gallo 8 SAS and placed in trust under the trust agreement. For the purposes of the trust, the valuation of Gallo 8 SAS subsidiary was carried out at recoverable value, based on the estimation of future flows based on budgetary data relating to the activities housed in the trust and internal billing flows. The results of the trust, acquired and not distributed at the end of the year, are included in the value of rights

Financial assets include investments in subsidiaries that the Company intends to keep, asset corresponding to the representative rights of assets transferred to the trust, as well as other financial assets, such as loans. Investments are recorded at acquisition cost. When the value in use of such investments is less than their gross value, a valuation allowance is set up for the difference. Provision for current accounts and loans are made if the net financial position is negative. In addition, a provision for risk is set aside for the surplus over the residual net negative balance. Investments in subsidiaries and associates held for the long-term are valuated, based on their value in use which is determined case by case based on the portion of equity represented by the shares, on re-evaluation of net assets or on recoverable value. The rights representative of the net assets transferred to the trust are the counterpart of the setting-up of the “Gallo 8” Security-Management Trust, of which Technicolor SA is the constituent and Equitis Gestion is the trustee. The trust

representing the net assets transferred to the trust.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020 290