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Part 3 - Financial statements
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contracting activity to the extent that they can reasonably
be allocated to the contract. Tender costs are included in
contract costs only if they can be identified separately
and measured reliably, and if it is probable that the
contract will be obtained.
The amounts included under the ‘Amounts Due From
Customers For Contract Work’ correspond to the costs
incurred plus the margin (less the losses) recognized on
contracts in excess of the advances billed to the customers
for contracts for which this difference is positive. While
the amounts included under the ‘Amounts Due To
Customers For Contract Work’ correspond to the
advances billed to the customers in excess of the costs
incurred plus the margin (less the losses) recognized on
contracts for other contracts.
3.5.3 Operating profit before non-recurring
items (REBIT)
The operating profit before non-recurring items is a
management result allowing a better understanding of the
recurring performance of the Group by excluding unusual
or infrequent items.
For the Group, those items are:
■ restructuring costs;
■ net impairment losses on non-current assets ;
■ changes in consolidation scope and;
■ other non-recurring items such as gains/losses on the
sale of available for sale financial assets.
3.5.4 Government Grants
Government grants related to staff costs are recognized
as income over the periods necessary to match them
with the related costs which they are intended to
compensate on a systematic basis.
Government grants related to tangible assets are presented
in deduction of the property, plant and equipment’s
carrying amounts. These grants are recognized as
income over the life of the depreciable assets.
Repayable government grant are transferred to
financial liabilities.
3.5.5 Income Taxes
Income taxes include both current and deferred taxes.
They are recognized in the income statement except if
they relate to elements recognized directly in equity, in
which case they are posted to equity.
The current tax is the amount of income tax payable/
recoverable in respect of the taxable profit/loss for a
period. Current income taxes for current and prior
periods are calculated based on the tax rates that have
been enacted by the balance sheet date as well as
adjustments related to previous periods.
Reforms to French business taxes were enacted on
31 December 2009 and apply as from 1 January 2010.
The new tax, the CET (“Contribution Economique
Territoriale”), has two components: the CFE (“Cotisation
Foncière des Entreprises”) and the CVAE (« Cotisation
sur la Valeur Ajoutée des Entreprises »). The second
component is determined by applying a rate to the
amount of value added generated by the business
during the year.
Given that the CVAE component is calculated as the
amount by which certain revenues exceed certain
expenses, the Group regards the CVAE component as
meeting the definition of income taxes specified in IAS
12§2 - Taxes which are based on taxable profits – and
has classified all amounts accounted for in the French
subsidiaries of the Group as from 2010 under the line
‘Income taxes’ in the income statement. This decision is
compliant with French practices.
Deferred taxes originate from temporary differences i.e.
differences between the carrying amounts of assets
and liabilities in the balance sheet and their tax base.
Deferred taxes are measured at the tax rates that are
expected to apply to the period when the asset is realized
or the liability is settled based on tax rates that have
been enacted or substantively enacted by the balance
sheet date.
Deferred tax liabilities related to financial assets in
subsidiaries are not recognized since the Group does
not expect that the timing difference will be reversed in
the foreseeable future.
Deferred tax assets are recognized for the deductible
temporary differences as well for the carry forward of
unused tax losses and credits to the extent that it is
probable that future taxable profits will be available
against which the deductible temporary differences and
the unused tax losses and credits could be utilized.
The carrying value of the deferred tax assets is
reviewed at each closing date. They are impaired when
it becomes unlikely that the deferred tax assets will be
utilized against future taxable profits.
3.5.6 Discontinued Business
A discontinued operation is a portion of an entity that
either is being or has been sold or disposed by the Group.
This portion of entity represents a significant separate
major line of business or geographical area of operations