Sales breakdown 2004 - Solvay

IFRS valuation rules
The main accounting policies used in preparing these consolidated financial statements are set out below:
1. Accounting system
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting
Standards (IFRS).
No standard which becomes mandatory only after December
31, 2004 was applied in advance at that date.
The financial statements also include all the information
required by the 4 th and 7 th European directives.
2. Consolidation
Companies controlled by the Group (i.e. in which the
Group has, directly, or indirectly, an interest of more than
one half of the voting rights or is able to exercise control
over the operations) have been fully consolidated. Separate
disclosure is made of minority interests. All significant transactions
between Group companies have been eliminated on
consolidation.
Companies over which the Group exercises joint control
with a limited number of partners (joint ventures) are consolidated
using the proportionate consolidation method.
Investments in companies over which the Group exercises
significant influence, but which it does not control, are
accounted for using the equity method.
3. Goodwill (consolidation difference)
Goodwill represents the difference between the cost of acquisition
and the Group’s interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associated company
or joint venture, at the acquisition date.
Positive goodwill existing before March 31, 2004 has continued
to be amortized on a straight-line basis until December
31, 2004. Positive goodwill arising on acquisitions made
after March 31, 2004 is not amortized, but tested at least
annually for impairment. Any negative goodwill is immediately
credited to the income statement.
4. Foreign currencies
Foreign currency transactions by Group companies are recorded
initially at the exchange rates prevailing at the transaction
dates. Monetary assets and liabilities denominated in
such currencies are then re-translated at the exchange rates
prevailing at the end of the accounting period with resulting
profits and losses recorded in the income statement for the
period.
Assets and liabilities of foreign entities included in the
consolidation are translated into EUR at the exchange rates
prevailing at the end of accounting period. Income statement
items are converted into EUR at the average exchange
rates for the period. The resulting translation differences arising
are transferred to the equity item “currency translation
differences”.
5. Retirement benefit costs
The Group operates a number of defined benefit and defined
contribution retirement benefit plans. Payments to defined
contribution benefit plans are charged as an expense as
they fall due.
The Group’s commitments under defined benefits plans, and
the related costs, are valued using the “projected unit credit
method” in order to determine the present value of the obligation
at closing date.
The amount recorded in the balance sheet represents the
present value of the defined benefit obligations, adjusted for
actuarial differences, for unrecognized past services costs and
for the fair value of external plan assets, limited in the case
of a surplus to the present value of available refunds and/or
reductions in future contributions.
Actuarial differences exceeding the higher of 10% of the present
value of the retirement benefit obligations and 10% of
the fair value of the assets of the external plan assets at
balance sheet closing date, are amortized over the expected
average remaining working life of the participating
employees.
6. Income taxes
Income taxes on profits for the period include both current
and deferred taxes. They are recorded in the income statement
except where they relate to items recorded directly in
equity, in which case they too are recorded in equity.
Current taxes are taxes payable on the taxable profit for the
period, calculated at the tax rates prevailing at the balance
sheet closing date, as well as adjustments relating to previous
periods.
Deferred tax assets and liabilities are required to be measured
at the tax rates that are expected to apply to the financial
year in which the asset is realized or the liability is settled,
based on tax rates (and tax laws) that have been enacted or
substantively enacted by the balance sheet date.
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Global Annual Report Solvay 2004