Michelin couv courteGB

3.1.2. The second contention arises concerning valuation of
seller’s receivables on the Viborg companies sold by it to Michelin
Group by way of repayment of loans made by Michelin Group
to seller.
The €87.7 million amount claimed by Michelin Group in this
connection takes into account an €40.2 million valuation
difference corresponding, in Michelin Group’s opinion, to the
amount of the over evaluation of financial debt sold to Michelin
Group by seller as repayment of loans granted by Michelin to
seller.
This over estimation of financial debt, which results in a reduction
in the net asset value of the acquired companies, was, at this
stage, retained for the determination of the goodwill, a goodwill
which was fully amortized in 2003.
Notes to the consolidated balance sheet
Strategy • Fundamentals • Businesses • Résultats Earnings
Notes to the Consolidated Financial Statements
The consolidated financial statements 2004 have been prepared in accordance with French generally accepted accounting principles,
including standard CRC 99-02 published by Comité de la Réglementation Comptable dealing with consolidated financial statements.
1. Goodwill (in € thousand)
Goodwill can be analyzed as follows:
3.2 Status of arbitration proceedings
The arbitration court has been appointed and asked to solve the
litigation submitted to it.
Pursuant to the contractual provisions governing dispute
between the parties concerning the acquisition price and the
repayment of loans granted by Michelin Group to seller,
an independent expert was appointed on February 18, 2004
to determine the amounts object of the above-described
differences.
The arbitration proceedings are under way and no decision as to
the case have so far been rendered by the arbitration court.
At this stage, Michelin Group’s accounting positions at December 31,
2003 remain unchanged.
Cost Amortization Net book value
and allowances
Goodwill at January 1, 2003 569,140 (261,780) 307,360
Acquisition of Viborg group 306,549 (306,549) –
Other increases 55,352 (29,373) 25,979
Decreases (1,395) 1,395 –
Translation adjustments and other (69,039) 39,295 (29,744)
Goodwill at December 31, 2003 860,607 (557,012) 303,595
Increases 8,353 (34,302) (25,949)
Decreases (308,119) 308,119 –
Translation adjustments and other (20,792) 15,183 (5,609)
Goodwill at December 31, 2004 540,049 (268,012) 272,037
Downward changes recorded in the period correspond to deconsolidation of fully amortized goodwill.
76•77