2007 Annual report - Groupe M6

financial accounts
notes to the consolidated financial statements
4.3
Foreign currency transactions
Foreign currency transactions are initially recorded in the functional currency (Euro) using
the exchange rate prevailing at the date of the transaction, in application of IAS 21 - Effects
of Changes in Foreign Exchange Rates.
At the balance sheet date, monetary assets and liabilities denominated in foreign currencies
are translated into the functional currency at the exchange rate prevailing at the balance
sheet date. All differences are recorded in the income statement. Non-monetary items in
foreign currencies which are valued at historic cost are translated at the exchange rate at
the initial date of the transaction.
Exchange differences resulting from the conversion of assets and liabilities denominated in
foreign currency arising from commercial transactions are accounted for in operating profit;
for financial transactions, these same differences are accounted for in finance income and
expense.
The treatment of foreign exchange hedges is detailed in note 4.16.
4.4
Business combinations and goodwill
Business combinations are accounted for in accordance with IFRS 3 Business
Combinations
In this context, goodwill represents the difference between the acquisition price, plus
related expenses, of the shares of consolidated entities and the Group share of the fair
value of their net assets, less any contingent liabilities, at the date of investment. The
evaluation period for this fair value may be up to 12 months following the acquisition.
When the acquisition price, together with related expenses, is less than the fair value
of the identified assets and liabilities and contingent liabilities acquired, the difference is
immediately recognised in the income statement.
In the specific case of the acquisition of minority interests in an already fully-consolidated
subsidiary and in the absence of any specific IFRS provision, the Group elected not to
recognise additional goodwill and to record under equity the difference between the
acquisition cost of the shares and the minority interests acquired.
Once allocated to each of the Cash Generating Units, goodwill is not amortised. It is
subject to impairment tests from the point of indication of impairment, and as a minimum,
once a year (see note 4.7).
In connection with its transition to IFRS in 2005, the Group adopted the option offered by
IFRS 1 First-time Adoption of IFRS not to restate business combinations prior to 1 January
2004 which do not comply with the recommendations of IFRS 3 Business Combinations.
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