Registration Document 2005 - Total.com

Notes to the consolidated financial statements
On February 14, 2006, the Board of Directors closed and
authorized the publication of the consolidated financial statements
for the year ended December 31, 2005.
Introduction
The consolidated financial statements of TOTAL S.A. and its
subsidiaries (the Group) have been prepared on the basis of IFRS
(International Financial Reporting Standards) as adopted by the
European Union, as of December 31, 2005.
The preparation of financial statements in accordance with IFRS
requires management to make estimates and apply assumptions
that affect the reported amounts of assets, liabilities and contingent
liabilities at the date of preparation of the financial statements
and reported income and expenses for the period. Management
reviews these estimates and assumptions on a continuous
basis, by reference to past experience and various other factors
considered as reasonable which form the basis for assessing
the book value of assets and liabilities. Actual results may differ
significantly from these estimates, if different assumptions or
circumstances apply.
Lastly, where a specific transaction is not dealt with in any
standards or interpretation, management applies its judgment to
define and apply accounting policies that will lead to relevant and
reliable information, so that the financial statements:
•
give a true and fair view of the Group’s financial position, financial
performance and cash flows;
• reflect the substance of transactions;
• are neutral;
• are prepared on a prudent basis;
• are complete in all material aspects.
Appendix 1 – Consolidated financial statements
Notes to the consolidated financial statements
Information concerning the first-time
application of IFRS
TOTAL - Registration Document 2005
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Pursuant to IFRS 1 “First-time adoption of International Financial
Reporting Standards”, the Group has chosen to apply the following
exemptions:
•
•
•
•
offsetting currency translation adjustment (CTA) against retained
earnings, as of January 1, 2004;
recording unrecognized actuarial losses and gains related to
employee benefits obligations as of January 1, 2004 in retained
earnings;
no retroactive restatement of business combinations that
occurred before January 1 st , 2004;
retrospective application of IFRS 2 “Share-based payments”
to all transactions within the scope of IFRS 2 and not solely
to the share-based compensation plans granted after
November 7, 2002.
The other exemptions included in IFRS 1 “First Time Adoption”
have not been applied at the transition date to the IFRS or did not
have any material impact on the consolidated financial statements.
IAS 32 “Financial Instruments: Disclosure and Presentation” and
IAS 39 “Financial Instruments: Recognition and Measurements”
have been applied as from January 1, 2004. The Group has
decided on an early application in 2004 of IFRS 6 “Exploration for
and Evaluation of Mineral Resources”. This standard is compatible
with previously used methods to record exploration and production
costs (see note 1 G to the consolidated financial statements: oil
and gas exploration and producing properties).
Description of the effects of the transition to IFRS on the net equity
and the results of the Group were provided for in the 2004 Annual
Report, and in the 2004 quarterly summarized financial statements
which were published in May 2005. This information is presented in
the note 32 to the consolidated financial statements.
The transition balance sheet as of January 1, 2004 included in the
note 32 differs from that published in May 2005 on the following
items. Financial instruments were presented in deduction of the
non-current financial debt, while they are now recorded separately
in the balance sheet either under “Hedging instruments of noncurrent
financial debt” on the asset side or “Non-current financial
debt” on the liability side. Similarly, current financial instruments
are recorded on either asset or liability accounts “Current financial
instruments” depending on whether it is an asset or a liability.
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