Registration Document 2005 - Total.com

9
Non-current debt
Appendix 1 – Consolidated financial statements
Notes to the consolidated financial statements
Changes in non-current debt have been presented as the net
variation to reflect significant changes mainly related to revolving
credit agreements.
S. Business combinations
Business combinations are recognized using the acquisition
method. This method implies the recognition of the assets, liabilities
and contingent liabilities of the companies acquired by the Group at
their fair value.
The difference between the acquisition cost of the shares and the
total valuation, at fair value, of the assets, liabilities and contingent
liabilities identified on the acquisition date is booked as goodwill.
If the cost of an acquisition is less than the fair value of the
net assets of the subsidiary acquired, an additional analysis is
performed on the identification and valuation of the identifiable
elements of the assets and liabilities. The residual negative goodwill
must be booked directly as net operating income.
The analysis of goodwill is finalized within one year from the date of
acquisition.
T. Emission rights
In the absence of a current IFRS standard or interpretation on
accounting for emission rights, the following principles have been
applied:
•
•
•
emission quotas issued free of charge are accounted for at zero
book value;
transactions that have been made on the market are recorded at
cost;
the liabilities resulting from potential differences between available
quotas and quotas to be delivered at the end of the compliance
period are accounted for as a liability, at fair market value.
U. Alternative IFRS methods
For measuring and recognizing assets and liabilities, the following
choices left by the IFRS norm among alternative methods have
been made:
•
•
tangible and intangible assets are measured using the historical
cost model instead of the revaluation model;
interest expenses incurred during the construction and acquisition
period of tangible and intangible assets are capitalized, as
provided for under IAS 23 “Borrowing Costs”;
176 TOTAL - Registration Document 2005
•
actuarial gains and losses on pension and other postemployment
benefit obligations are recognized according to the
corridor method as from January 1, 2004 (see note 1 Q to the
consolidated financial statements);
•
jointly-controlled companies are consolidated using the
proportionate method, as provided for in IAS 31 “Interests in
Joint Ventures”.
V. New accounting principles not yet in effect
The standards or interpretations published respectively by
the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC)
which were not yet in effect at December 31, 2005 were as follows:
(i) IFRS 7: Financial instruments: disclosures
In August 2005, the IASB issued IFRS 7 “Financial Instruments:
Disclosures”. The new standard replaces IAS 30 “Disclosures in
financial statements of Banks and Similar Financial Institutions” and
provides amendments to IAS 32 “Financial Instruments: Disclosure
and Presentation”. IFRS 7 requires disclosure of qualitative and
quantitative information about exposure to risks resulting from
financial instruments. It applies to the annual period beginning on
or after January 1, 2007. The application of IFRS 7 should not
have a material impact for the Group given the disclosures already
presented in the consolidated financial statements for the year
ended December 31, 2005.
(ii) IAS 19: Employee benefits
In December 2004, the IASB issued limited amendment to
IAS 19 “Employee Benefits”. This revision requires in particular
providing additional information in the notes to the consolidated
financial statements. It applies to annual period beginning on or
after January 1, 2006. The application of IAS 19 should not have
a material effect on the information provided in the notes to the
consolidated financial statements.
(iii) IAS 39: Financial instruments: recognition and measurement
In 2005, the IASB issued three amendments to IAS 39:
Cash flow hedges for future intra-group transactions
In April 2005, the IASB issued an amendment to IAS 39 concerning
cash flow hedges for future intra-group transactions. The purpose
of this revision is to allow, in the consolidated financial statements,
the designation of a future intra-group transaction as an item
hedged against the foreign exchange risk in a cash flow hedge
relation, subject to certain conditions.