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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NOTES TO THE ANNUAL FINANCIAL STATEMENTS OF FRANCE TELECOM S.A.
NOTE 1
Description of business and status
France Telecom S.A. (“ the Company” ) is the parent company
of the France Telecom Group. France Telecom S.A. provides
consumers, businesses and other telecommunications
operators with a wide range of services including fi xed telephony
and mobile telecommunications, data transmission, i nternet
and multimedia, and other value-added services.
France Telecom S.A. is governed by French corporate law,
subject to specifi c laws governing the company, particularly
French law number 90-568 of July 2, 1990 relating to the
organization of public postal and telecommunications services,
as amended by French law number 96-660 of July 26, 1996
and by French law number 2003-1365 of December 31, 2003.
France Telecom S.A. is also regulated by its by-laws.
The activities of the Company are governed by European
Union directives and by the law on telecommunications
regulation, which established the regulatory authority for the
telecommunications industry (Service Universel et Autorité de
Régulation des Communications Electroniques et des Postes:
Arcep).
France Telecom S.A. has been listed on Eurolist compartment A
by Euronext Paris and on New York Stock Exchange (“ NYSE” )
since 1997.
NOTE 2
Accounting policies
The fi nancial statements of France Telecom S.A. have been
prepared in accordance with generally accepted accounting
principles in France and with the provisions of the French
General Accounting Plan (Plan Comptable Général).
2.1 Application of New Accounting
Standards
No new standards were applied in 2009.
2.2 Other Accounting Policies
There were no changes of accounting method in 2009.
2.2.1 Transactions in foreign currencies
Monetary assets and liabilities in foreign currencies are translated
at the year-end exchange rate. Losses or gains arising on the
translation of receivables and payables at the year-end rate
are recognized in the balance sheet respectively as unrealized
foreign exchange losses on the asset side or unrealized foreign
exchange gains on the liability side.
For fi nancial transactions, unrealized gains or losses on all
balance sheet and off-balance sheet positions are determined by
currency and by year of due date. For commercial transactions,
unrealized gains or losses are determined by currency.
A provision is recorded for any net unrealized exchange losses.
2.2.2 Revenue recognition
The main revenues from France Telecom’s activities are
recognized as follows:
Equipment sales:
The revenue from the sale of equipment and installation fees
are recognized when delivered to the client, or when the line is
activated.
E quipment rentals:
The e quipment lease revenue is recognized on a straight-line
basis over the life of the lease agreement;
C ontent sales:
The revenue from revenue-sharing arrangements (Audiotel,
premium rate number, special numbers, etc.) are recognized
gross when France Telecom S.A. has a reasonable latitude
in setting prices and determining the key features of the
content (service or product) sold to the end-customer; and
net of amounts due to the service provider when the latter is
responsible for the service and for setting the price to be paid
by subscribers;
The revenue from the sale or provision of content (audio, video,
games, etc.) via various communication systems (PC, TV, fi xedline,
etc) are recognized gross when France Telecom S.A. is
the primary obligor in the transaction with respect to the endcustomer
(i.e. when the customer has no specifi c recourse
against the content provider), when France Telecom S.A. bears
the inventory risk and has a reasonable latitude in the selection
of content providers and in setting prices charged to the endcustomer;
and net of amounts due to the content provider
when the latter is responsible for supplying the content to the
end-customer and for setting the price to subscribers.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM
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