Registration Document

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Consolidated information
Notes to the Consolidated Financial Statements
2.14 Borrowing costs
Borrowing costs are recognized as follows:
• borrowing costs directly attributable to the
acquisition, construction or production of a noncurrent
asset are capitalized as part of the cost of
the underlying asset;
• borrowing costs not directly attributable to a
non-current asset as defined in IAS 23 reduce
the related borrowing in the balance sheet and
are recognized in the income statement over the
term of the borrowing.
2.15 Sodexo SA treasury shares
Sodexo SA shares held by the Sodexo itself and/or by
other Group companies are shown as a reduction in
consolidated shareholders’ equity at their acquisition
cost.
Gains and losses on acquisitions and disposals
of treasury shares are recognized directly in
consolidated shareholders’ equity and do not affect
profit or loss for the period.
2.16 Provisions
A provision is recognized if (i) an entity has a legal
or constructive obligation at the balance sheet date,
(ii) it is probable that settlement of the obligation will
require an outflow of resources, and (iii) the amount
of the liability can be reliably measured.
Provisions primarily cover commercial, employeerelated
and tax-related risks and litigation arising in
the course of operating activities, and are measured
in accordance with IAS 37 using assumptions that
take account of the most likely outcomes.
Where the effect of the time value of money is
material, the amount of the provision is determined
by discounting the expected future cash flows at a
pre-tax discount rate that reflects current market
assessments of the time value of money and any risks
specific to the liability.
Sodexo Registration Document Fiscal 2011
Loss-making contracts
A provision for onerous contract is established where
the unavoidable costs of meeting the obligations
under a contract exceed the economic benefits
expected to be received under it.
2.17 Employee benefits
2.17.1 Short-term benefits
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Group employees receive short-term benefits such
as vacation pay, sick pay, bonuses and other benefits
(other than termination benefits), payable within
12 months of the related service period.
These benefits are reported as current liabilities.
2.17.2 Post-employment benefits
Sodexo measures and recognizes post-employment
benefits in accordance with IAS 19. As a result:
• contributions to defined-contribution plans are
recognized as an expense; and
• defined-benefit plans are measured using actuarial
valuations.
Sodexo uses the projected unit credit method as the
actuarial method for measuring its post-employment
benefit obligations, on the basis of the national or
company-wide collective agreements effective
within each entity.
Factors used in calculating the obligation include
length of service, life expectancy, salary inflation,
staff turnover, and macro-economic assumptions
specific to countries in which Sodexo operates (such
as inflation rate, rate of return on plan assets and
discount rate).
Actuarial gains and losses arising at each balance
sheet date are recognized in other comprehensive
income, as permitted by IAS 19 Revised. Actuarial
gains and losses do not affect the income statement.
At the time of the transition to IFRS, actuarial losses
and gains on pensions and related benefits as of
September 1, 2004 were recognized in shareholders’
equity.