registration document France Telecom 2009 - Orange.com

20 NOTES
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
TO THE ANNUAL FINANCIAL STATEMENTS OF FRANCE TELECOM S.A.
Employment termination benefits
Early retirement plan in France
Over the period 1996-2006, France Telecom S.A. set up an
early retirement plan for civil servants and contract-based
employees. These employees receive 70% of their salary
between the age of 55 and 60. The benefi t is accounted for in
the same way as lump-sum benefi ts payable on termination of
service and a provision is recognized for the obligation.
Other employment termination benefits
Any other termination benefi ts are also determined on an
actuarial basis and covered by provisions.
Actuarial differences relating to termination benefi ts observed
during the course of the year are immediately recognized in the
income statement.
Other long-term benefits
Other long-term benefi ts offered by France Telecom S.A.
concern primarily long-term paid leave and the Part-Time for
Senior plan.
Actuarial differences observed during the course of the year are
immediately recognized in the income statement.
2.2.18 Other employee benefits
Individual training rights for employees
(Droit Individuel à la Formation - DIF)
France Telecom S.A. has applied French GAAP (opinion
2004-F of CNC’s Comité d’Urgence (Emerging Accounting
Issues Committee)) to account for statutory training rights. Any
expenditure incurred in this respect is recorded as a current
expense and no provision is recognized. The credit of training
hours is disclosed.
In the limited number of cases (request for individual training
leave, redundancy or resignation) where these costs cannot
be considered as remuneration of future services, the resulting
short-term obligation is provided for as soon as its settlement
becomes probable or certain.
Employee shareholding plan
If the State decides to sell a portion of France Telecom’s capital,
preferred subscription rights must be awarded to the Group’s
current and former employees, in accordance with Article 11 of
the 1986 French Privatization Act.
The employer’s contribution to the employee shareholding plan
is recognized in personnel expenses.
Free share awards
In accordance with CRC rule n° 2008-15 of December 4, 2008,
where the award of free shares is conditional on the benefi ciary’s
continued employment over a given period, the award results
in the recording of a provision that accrues over the qualifying
period.
The amount of the provision corresponds to the cost of the
shares on the date of their allocation to the plan (purchase price)
or, for shares that have not yet been purchased, the probable
cost of purchasing the shares measured on the reporting date
(i.e. France Telecom S.A. share price on December 31).
In accordance with CRC rule no. 2008-15, no impairment
losses are recognized in respect of shares allocated to free
share award plans.
2.3 Use of estimates
In preparing France Telecom S.A.’s accounts, management
makes estimates, insofar as many elements included in the
fi nancial statements cannot be measured with precision.
The management revises these estimates if the underlying
circumstances evolve or in light of new information or experience.
Consequently, estimates made at December 31, 2009 may
subsequently be changed. The assumptions underlying the
main estimates made concern provisions, property, plant &
equipment, intangible assets and equity interests.
Stock option plans
In line with CRC rule no. 2008-15 of December 4, 2008, no
expense is recognized in respect of stock option plans that do
not lead to an outfl ow of resources for France Telecom S.A.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM