sain t-gobain annu al report 2008 annual report

Notes
to the parent company
financial statements
The financial statements cover the twelve-month period
from January 1 to December 31, 2008.
The following notes form an integral part of the financial
statements.
These financial statements were approved by the Board
of Directors on February 19, 2009.
NOTE 1
Accounting principles and methods
The financial statements of Compagnie de Saint-Gobain have
been drawn up in accordance with the accounting principles
set out in the 1999 French Chart of Accounts.
They include the accounts of the Company’s German branch.
Intangible assets
Purchased goodwill that is not legally protected is amortized
over 25 years. Other intangible assets consist mainly of
computer software. They are measured at cost and amortized
over a period of three or four years.
Property and equipment
Property and equipment are stated at cost (purchase price
plus incidental expenses), except for assets acquired prior
to December 31, 1976 which have been revalued.
They are depreciated over their estimated useful lives using
the straight-line or declining-balance method. The most
commonly used useful lives are as follows:
Buildings 40 to 50 years Straight-line
Improvements and additions 12 years Straight-line
Fixtures and fittings 5 to 12 years Straight-line
Office furniture 10 years Straight-line
Office equipment 5 years Straight-line
Vehicles 4 years Straight-line
Computer equipment 3 years Straight-line
or decliningbalance
Investments in subsidiaries and affiliates,
other investment securities and other financial
investments
On initial recognition, investments in subsidiaries and
affiliates are stated at cost excluding any incidental expenses.
They are subsequently measured at the lower of cost and fair
value. Fair value is estimated at each balance sheet date based
on the Company’s equity in the underlying net assets
and the proportion of consolidated net assets represented
by the investment. Specific impairment tests may be
performed on a case-by-case basis, to determine the net
present value of future cash flows, excluding interest expense
but after tax, based on business plans or long-term budget
projections. No unrealized capital gain is recorded if fair value
exceeds cost, and unrealized gains and losses are not offset.
Compagnie de Saint-Gobain shares held by the Company
at year-end for allocation upon exercise of stock options
are recorded in the balance sheet under “Other investment
securities”. They are carried at the lower of cost, market price
or the option exercise price when the exercise of the options
is probable.
Receivables
Receivables are stated at the lower of their nominal value
and recoverable amount.
Marketable securities
Marketable securities mainly include units in money-market
funds (SICAV) and are stated at the lower of cost and market.
Foreign currency transactions
Income and expenses in foreign currencies are recorded
at the exchange rate prevailing on the transaction date.
Receivables, payables and bank balances in foreign currencies
are converted at the year-end exchange rate, along
with the related hedging instruments, and the differences
arising on translation are recorded in the balance sheet
under “Translation gains” or “Translation losses”. Provisions
are booked for any translation losses that are not hedged.
NOTES THE PARENT COMPANY FINANCIAL STATMENTS
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Saint-Gobain – Financial Report 2008