Michelin couv courteGB

3.2.2. Impact on the presentation of the statement of
income (IAS 1)
IAS 1 allows for:
• Earnings to be presented by nature or by function;
• The structure of the statement of income to be freely split
between sales and net interest income (expense).
On the other hand, the concepts of operating income and nonrecurring
items are not covered by IFRS.
So as to maintain the transparency necessary for the assessment
of its business activities and to facilitate comparability with its
main listed competitors, Michelin made the following choices:
• To present the statement of income by function;
• To separately identify non-recurring items, with income from
operations before and after non-recurring items.
However, since the 2004 accounts under French standards were
presented by nature, the 2004 earnings reconciliation table has
been prepared by nature. The 2005 IFRS statements of income
at June 30 and December 31 will be published by function, with
comparatives for the corresponding 2004 periods.
4. Reconciliation tables (in millions of euros)
4.1. Reconciliation of Shareholders’ equity at January 1, 2004
Strategy • Fundamentals • Businesses • Résultats Earnings
International Financial Accounting Standards
Shareholders’ equity
French GAAP as
Nature of differences Gross amounts Deferred tax Net amounts
at December 31, 2003 under
IFRS presentation 4,404
Adjustments Employee benefits:
Recognition of actuarial gains and losses
not recognized at December 31, 2003. (1,577) 422 (1,155)
Impairment of assets:
– Impairment of Cash Generating Units.
– Adjustment of impairment losses
(160) 52 (108)
previously recognized. 12 – 12
Finance leases:
Difference between the amounts recorded as property,
plant and equipment and the present value
of future lease payments. (69) 27 (42)
Change of consolidation method:
3.2.3. Impact on balance sheet presentation (IAS 1)
Under IAS 1, the balance sheet presentation must be based
on the maturity of assets and liabilities, which will therefore be
classified as “current” and “non-current”, depending, generally,
on whether they mature in less than one year or more than one year.
A number of headings classified as “deferred income and
accrued expenses” or “prepaid expenses and accrued income”
under French GAAP must, under IFRS, be reclassified under other
headings. This is particularly the case with “assets” in respect of
employee benefits and deferred tax assets. Moreover, provisions,
under IFRS, must in future be classified as long-term liabilities.
3.2.4. Impact on cash flow statement presentation
(IAS 7)
The main change resulting from the application of IAS 7 concerns
the use of the average exchange rate, rather than the closing rate,
for the determination of cash flows denominated in euros.
This change, and the other changes resulting from the application
of IAS 7, are not considered significant for Michelin
at December 31, 2004.
The tire fitting and repair businesses, held jointly
with Continental, are consolidated by the equity method. (12) – (12)
Other adjustments (33) (6) (27)
IFRS
as at January 1, 2004 3,072
98•99