ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

6 Notes
2011 CONSOLIDATED FINANCIAL STATEMENTS
to the Consolidated Financial Statements
Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and
the estimated costs necessary to make the sale.
2.14 TRADE AND OTHER CURRENT
RECEIVABLES
Trade receivables are measured at fair value net of any
required provisions for impairment.
A provision for impairment of trade and other current receivables
is recorded when it becomes probable that a receivable will
not be collected in full. Impairment losses are recognised
through the income statement, in the operating profi t.
2.15 CASH AND CASH EQUIVALENTS
Cash and cash equivalents as shown in the consolidated cash
fl ow statement comprise cash at bank and in hand plus shortterm
investments that are liquid and easily convertible into a
measurable amount of cash.
The same defi nition also applies to cash and cash equivalents
as shown in the balance sheet.
In accordance with IAS 39 “Financial Instruments”, short-term
investment securities are measured at fair value.
Changes in the fair value of securities classifi ed as held-fortrading
are taken to fi nancial profi t or loss without exception.
2.16 EQUITY
Share capital
Ordinary shares are classifi ed in “Share capital”. Costs incurred
on new share issues are offset against the issue proceeds, net
of taxes.
Other equity components
In addition to share capital, consolidated equity includes the
following:
� “Share premium”, which corresponds to the excess paid
by shareholders of the parent company over the par-value
price of a stock issue;
� “Treasury shares”, deducted from equity at their acquisition
cost. Any gains or losses from the sale of these shares are
recognised directly in equity and not taken to the income
statement;
� “Cumulative translation adjustment”, which records currency
translation adjustments deriving from the translation of
the fi nancial statements of foreign subsidiaries having a
functional currency different from the euro;
136 / SAFT - ANNUAL REPORT 2011
� “Fair value and other reserves”, which primarily records
changes in market values of derivatives designated as cash
fl ow hedges and investment hedges;
� “Consolidated reserves”, which comprises the nondistributed
net income of the parent company as well as the
Group’s share in the retained earnings of fully-consolidated
companies and companies accounted for by the equity
method since their fi rst consolidation date;
� “Minority interest in equity”, which comprises the nondistributed
net income share of non Group shareholders in
consolidated subsidiaries.
2.17 SHARE-BASED PAYMENTS
The Group has put in place long-term remuneration plans which
will be settled in equity instruments (stock options). The fair
value of services rendered by employees in exchange for the
grant of the options is recognised in expenses, with a double
entry to shareholders’ equity. The total amount recognised in
expenses over the vesting period is determined on the basis
of the fair value of the options granted, without taking into
account conditions for vesting which are not market conditions.
Conditions for vesting which are not market conditions are
taken into account in the assumptions concerning the number
of options that are likely to become exercisable.
At each balance sheet date, the entity reviews the number of
options that are likely to become exercisable. If necessary,
it recognises the impact of changes in its estimates through
profi t and loss with a corresponding double entry adjusting
shareholders’ equity.
Amounts received when the options are exercised are credited
to the “Share capital” and “Share premium” captions, net of
directly attributable transaction costs.
2.18 DEBT
In accordance with IAS 39 “Financial Instruments”, debt
is initially recognised at cost, which is the fair value of the
consideration received net of transaction costs. Subsequent
to initial recognition, interest-bearing debt is measured at
amortised cost using the effective interest method. The effective
interest rate is the rate which makes it possible to equalise
the net cash of the loan with all the cash fl ows produced by
servicing the loan. Amortised cost is calculated taking into
account all issuance costs and any redemption discounts or
premiums.