Annual report 2008 - Altarea Cogedim

1999 concerning the overhaul of French GAAP in 1982.
The general accounting conventions used observe the
principles of conservatism and consistency, with the
financial statements being drawn up on a going concern
basis, in accordance with the accrual principle and the
general rules for preparing and presenting annual financial
statements.
Elements in the financial statements are measured at
historical cost.
Unless stated otherwise, the annual financial statements
were drawn up and presented in thousands of euros.
The following sections describe the Company’s primary
accounting methods.
Intangible assets
Intangible assets are measured initially at acquisition cost.
They may be written down when their carrying amount
differs significantly from their value in use, as defined in
French GAAP.
Software acquired is usually amortised on a straight-line
basis over 3 years.
Property, plant and equipment
Gross value of property
Property is initially recorded at acquisition cost, which for
contributed property is the contribution value excluding
purchase costs and for new property is the construction or
refurbishment cost. Purchase costs (transfer duties, expert
fees, commissions, and stamp duties) are recognised as
expenses.
The Company uses the component method to calculate
the useful lives of its property, as recommended by the
French Federation of Property and Land Companies (FSIF).
The useful life of each property component is given in the
following table:
Components Useful lives
(Shopping centres)
Useful lives
(business premises)
Structural work (structures,
road and utilities works)
50 years 30 years
Facades, seals 25 years 30 years
Technical equipment 20 years 20 years
Fixtures and fittings 15 years 10 years
Property depreciation
Property depreciation is calculated based on the following:
• the useful lives of the components. If the components have
different useful lives, each component whose cost makes
up a significant portion of the total cost is depreciated
separately over its individual useful life; and
• the property’s acquisition cost less its residual value, where
the residual value is the estimated amount the Company
would receive if it sold the property at current market prices,
less any selling expenses, assuming the property was in the
condition expected at the end of its useful life. In the light
of the long useful lives used by the company, the residual
values of all components are assumed to be zero.
Provision for property impairment
The Company’s property is appraised twice per year by an
independent appraiser, Cushman & Wakefield, to determine
its market value.
Because the Company recognises purchase costs as
expenses, the current value of its property is essentially
equal to the appraisal value excluding fees, after taking into
account any probable near-term developments that are not
included in the appraisal.
The Company recognises an impairment loss for the
difference whenever the current value of a property asset
falls significantly below its carrying amount.
Other property, plant and equipment
Other property, plant, and equipment is initially recorded at
acquisition cost.
Transport, office, and computer equipment is depreciated
over five years.
Financial assets
The Company’s financial assets include shares held in
subsidiaries and participating interests, as well as loans and
advances to the Company’s indirect participating interests.
Financial assets are measured at acquisition cost or
contribution value.
Financial assets may be impaired where their carrying
amount falls substantially below their value in use as defined
in French GAAP, where value in use is based on several
criteria, such as equity, earnings and earnings outlook, longterm
growth prospects and economic climate. The market
value of assets held by subsidiaries and sub-subsidiaries is
taken into account.
Receivables
The Company’s receivables are carried at nominal value.
They consist of group receivables and trade receivables
from shopping centres.
An allowance for impairment of receivables is set aside
when there is evidence that the Company will not be able
to collect all amounts due. Allowances are calculated
separately for each customer after subtracting the security
deposit and accounting for the length that the receivable
has remained outstanding, any progress made on collection
efforts, and any guarantees that have been received.
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