Annual report 2008 - Altarea Cogedim

CONSOLIDATED FINANCIAL STATEMENTS
The definitive allocation of goodwill arising from the
acquisition of Cogedim based on the new CGUs had no
material impact on the Group’s financial statements at
31 December 2008. The level of impairment charges would
have been more or less identical before and after the change
in accounting method.
See note 12 “Impairment of assets under IAS 36” and
section 12.1.
7.4. Preparation of the consolidated
financial statements
The consolidated statements comprise the financial
statements of ALTAREA SCA and its subsidiaries at
31 December 2008, as well as its interests in associated
companies and jointly controlled entities.
In accordance with IAS 27, exclusive control exists when
ALTAREA has the power to govern the financial and operating
policies of its subsidiaries and also to appoint, dismiss and
summon the majority of members of the Board of Directors
or the equivalent management body. Companies over which
ALTAREA exercises control are fully consolidated. Control is
presumed to exist when ALTAREA directly or indirectly holds
a majority of the voting rights. Effective control exists when
ALTAREA has the power to control the Group’s strategy and
its financial and operating policies.
Subsidiaries are consolidated from the date at which control
is acquired until the date at which control ceases to be
exercised, notably in the event of a disposal.
Subsidiaries’ financial statements are prepared for the
same accounting period as for the parent company using
consistent accounting policies.
Reciprocal items, dividends received from consolidated
companies and profits on intercompany transactions
are eliminated upon consolidation. Only the profits are
eliminated on fees internal to the Group (for delegated
project management, operating management, design
studies, etc.) that are capitalised or held in inventory. For
proportionately consolidated companies, eliminations are
reduced in proportion to ALTAREA’s percentage ownership.
7.5. estimated and assumptions affecting
assets and liabilities
In preparing financial disclosures in accordance with
generally accepted accounting principles, the Group’s
management must make estimates and use assumptions
that affect not only the amounts presented as assets and
liabilities, including contingent assets and liabilities at the
disclosure date, but also the amounts presented as income
and expense for the period.
2008 brought an economic and financial crisis, the scale
and duration of which could not be forecast beyond the
balance sheet date. Accordingly, management reviewed its
estimates and assumptions on a regular basis using its past
experience and various other factors deemed reasonable
in the circumstances. These represent the basis for its
assessment of the carrying amount of income and expense
items and of assets and liabilities. These estimates have
an impact on the amount of income and expense items
and on the carrying amount of assets and liabilities. It is
conceivable that the actual amounts may subsequently
differ from the estimates adopted.
The main items that require estimates at the balance sheet
date based on assumptions about the future, and for which
there is significant risk of a material change in value from
that recorded on the balance sheet, concern the following:
Measurement of intangible items
– the measurement of goodwill (see notes 7.15, 12.1 and 12.3),
– the measurement of the Cogedim brand (see notes 7.16
and 12.2)
Measurements of other assets and liabilities
– measurement of investment properties (see note 7.12),
– measurement of assets under development (see note 7.13,
7.14 and 12.4),
– measurement of customer relationships (see notes 7.10
and 12.5)
– measurement of inventories (see note 7.16)
– measurement of deferred tax assets (see note 7.23 and 15)
– measurement of financial instruments (see notes 7.18
and 13.21).
Operating profit estimates
– the measurement of net property income and services using
the percentage-of-completion method (see note 7.24)
The uncertainties arising from the economic and financial
crisis make it harder to measure assets and liabilities,
income and expense items predicated on assumptions of:
– completion of the business plans used to conduct
impairment tests for goodwill, intangible assets, including
customer relationships and brands, properties under
development and the capitalisation of deferred taxes
– determination of the market value of investment properties
based on an analysis of transactions in a market in which
transactions are fewer and further between,
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