Registration Document

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Consolidated information
Notes to the Consolidated Financial Statements
assets of the CGU in proportion to the carrying
amount of each asset.
2.8.3 Reversal of impairment losses
Impairment losses recognized with respect to
goodwill cannot be reversed.
Impairment losses recognized with respect to any
other asset may only be reversed if there is an
indication that the impairment loss is lower or no
longer exists. The amount reversed is based on new
estimates of the recoverable amount.
The increased carrying amount of an asset resulting
from the reversal of an impairment loss cannot
exceed the carrying amount that would have been
determined for that asset had no impairment loss
been recognized.
2.9 Client investments
On some contracts, Sodexo makes a financial
contribution to the purchase of equipment or fixtures
on the client site that are necessary to fulfill service
obligations. The amortization of these assets is
recognized as a reduction to revenues over the period
of the service obligation.
In the cash flow statement, changes in the value of
these investments are presented as a component of
investing cash flows.
2.10 Inventories
Inventories are measured at the lower of cost or net
realizable value. Cost is determined by the FIFO
(First In First Out) method.
2.11 Trade and other receivables
Trade and other receivables are initially recognized
at fair value, and are subsequently measured at
amortized cost less impairment losses recognized
in the income statement.
Impairment is recognized when there is objective
evidence of the Group’s inability to recover the full
amount due under the initial contract terms. The
impairment recognized represents the difference
Sodexo Registration Document Fiscal 2011
between the carrying amount of the asset and
the discounted future cash flow, estimated using
the initial effective interest rate. The resulting
impairment loss is recognized in the income
statement.
2.12 Financial instruments
Financial assets and liabilities are recognized and
measured in accordance with IAS 39 “Financial
Instruments: Recognition and Measurement”.
Financial assets and liabilities are recognized in the
balance sheet when Sodexo becomes a party to the
contractual provisions of the instrument.
The fair values of financial assets and derivative
instruments are determined on the basis of quoted
market prices or of valuations carried out by the
depositary bank.
2.12.1 Financial assets
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Under IAS 39, financial assets are measured and
recognized in three main categories:
• available-for-sale financial assets include
equity investments in non-consolidated entities,
marketable securities with maturities greater
than three months, and restricted cash. They
are measured at fair value, with changes in fair
value recognized in other comprehensive income.
When an available-for-sale financial asset is sold
or impaired, the cumulative fair value adjustment
recognized in other comprehensive income is
transferred to the income statement. For securities
listed on an active market, fair value is considered
to equal market value. If no active market exists,
fair value is generally determined based on
appropriate financial criteria for the specific
security. If the fair value of an available-for-sale
financial asset cannot be reliably measured, it is
recognized at cost;
• loans and receivables include financial and
security deposits, and loans to non-consolidated
equity investees. These financial assets recognized
in the balance sheet at fair value and subsequently
at amortized cost, which is equivalent to
acquisition cost as no significant transaction costs
are incurred in acquiring such assets. They are