registration document France Telecom 2009 - Orange.com

financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
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CONSOLIDATED STATEMENTS
Standard / Interpretation
IFRS 8
Operating Segments
IAS 36 amended by IFRS 8
Impairment Tests
IAS 1
Presentation of Financial Statements
Consequences for the Group of the standards and interpretations applied in 2009 which
affect the Group’s financial situation
IFRS 8 “ Operating Segments” supersedes IAS 14 “ Segment Reporting” . Operating segments are
components of the Group that engage in business activities and whose operating results based
on the internal reporting are regularly reviewed by the chief operating decision maker (the Chief
Executive Offi cer for the Group) in order to decide the allocation of resources and the assessment
of the operating segments’ performance. Segment information shall correspond to operating
segments or relevant aggregation of operating segments.
In order to refl ect organizational changes, whereby its integrated carrier strategy and synergies
are rolled out in individual countries, the Group changed its segment reporting as of January 1,
2009, from an analysis by business activity (Personal Communication Services, Home
Communication Services and Enterprise Communication Services) to an analysis mainly to a
country-based reporting structure. 7 new operating segments are now reported: France, United
Kingdom, Poland, Spain, Rest of the World, Enterprise and International Carriers and Shared
Services (IC & SS). The reportable segment Rest of the World aggregates the business activities
in the countries of AMEA (Africa, Middle East and Asia) and EME (Europe and Middle East).
IAS 36 has been modifi ed by IFRS 8 with a compulsory application date similar to that of IFRS 8,
namely January 1, 2009, fi rst-application date retained by the Group.
For impairment test purposes, IAS 36 required that goodwill should be allocated to groups
of Cash-Generating Units (CGUs) that correspond to the level at which goodwill is internally
monitored, which is not larger than a business segment (fi rst level of segment reporting for the
Group) or the geographic segment (second level of segment reporting for the Group). Therefore,
the Group monitored goodwill for Poland, Jordan and Senegal by country and tested it at this
level, aggregating Home and Personal businesses.
From now on, in the amended IAS 36, the largest level for impairment testing is the operating
segment as defi ned by IFRS 8. In the absence of transitional provisions, the IFRIC received a
request for guidance on the transition arrangements in IFRS 8 and its interaction with IAS 36.
The IFRIC identifi ed two alternative treatments: either prior period adjustment or current
period adjustment, but the IFRIC decided not to add the issue to its agenda. The Group
has applied the IAS 8 general principle of retrospective application. This leads to identify the
operating segments in accordance with the principles of IFRS 8 in the internal reporting used
until December 31, 2008. Since Group’s internal and external reporting are aligned, operating
segments as defi ned by IFRS 8 are the business segments over the 2005-2008 period.
As a consequence, goodwill relating to Home and Personal businesses for the threeabovementioned
countries has been tested separately on a retrospective basis. This leads
to additional impairment relating to Poland and Jordan Home businesses compared with the
historical impairment accounted for, respectively amounting to 507 and 48 million euros as at
January 1, 2007. This impairment is accounted for retrospectively as a change in accounting
policy against equity as at January 1, 2007 (see below).
The application of this revision is without effect on the Group fi nancial position but modifi es the
presentation of its fi nancial statements, including:
■
the statement of changes in equity presents only transactions between the shareholders;
■ all changes in assets and liabilities for a period are presented in two statements: a separate
income statement (components of profi t or loss) and a statement of comprehensive income
(components of other comprehensive income).
The breakdown of the amount reclassifi ed to profi t or loss in the current period that were
previously recognized in other comprehensive income (reclassifi cation adjustments) is disclosed
in the notes, as well as the breakdown of the amount of income tax relating to each component
of other comprehensive income (see Notes 10, 16, 21 and 23).
Moreover, when a change in accounting policy is applied retrospectively, a statement of fi nancial
position has to be presented as at the beginning of the earliest comparative period, namely as
at January 1, 2007 for the Group.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM
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