REGISTRATION DOCUMENT - Bourbon

4NotesCONSOLIDATED FINANCIAL STATEMENTSto the consolidated financial statements1.5.5 Intangible assetsIntangible assets acquired separately are initially reported at cost. Thecost of an intangible asset acquired within a business combinationis its fair value on the acquisition date. After the initial accounting,intangible assets are carried at cost less any accumulatedamortization and accumulated impairment losses.The Group assesses whether the useful life of an intangible asset isfi nite or indefi nite.Intangible assets with a fi nite useful life are amortized over theireconomic useful life and are subject to an impairment test whenthere is an indication that the intangible asset is impaired. Theamortization period and method for amortizing an intangible assetwith a fi nite useful life are reviewed at least at the closing of eachyear. Any change in the expected useful life or the expected rate ofconsumption of the future economic benefi ts representing the assetis accounted for by modifying the amortization period or method, asapplicable, and such changes are treated as changes in estimates.The amortization expense for intangible assets with a fi nite usefullife is booked on the income statement in the appropriate expensecategory depending on the function of the intangible asset.The amortization periods of the main intangible assets are:3 software: 3 years;3 leasehold rights, over the period of the concessions: 38 to50 years.1.5.6 Property, plant and equipmentProperty, plant and equipment are booked at cost after deductingaccumulated depreciation and any accumulated impairment losses.The residual values, useful lives and depreciation methods arereviewed at each year-end and changed if necessary.VesselsA) Gross valueProperty, plant and equipment consist primarily of vessels valued onthe date they are included in the Group’s assets at cost, i.e. the costincurred to commission the asset for the projected use.The cost of a tangible asset consists of the purchase price paid to athird party (including customs duties and non recoverable taxes, butnet of discounts and commercial rebates obtained from the supplier),plus the following acquisition costs:3 directly attributable costs incurred to bring the asset into workingcondition for the planned use;3 installation costs;3 mobilization costs to the operating location;3 sea trial costs;3 legal documentation costs;3 professional fees (architects, engineers);3 commissions;3 costs for interim loans directly intended to fi nance the acquisitionof the asset.A tangible asset may include several components with separate lifecycles or rates of depreciation. In this case, the main elements of theasset are identifi ed and recognized separately using the componentbasedapproach.At BOURBON, each vessel consists of two components:3 a “vessel” component;3 an “overhaul” component, representing the cost of an overhaul.An overhaul consists of maintenance operations performed at regularintervals, based on a long-term plan designed to meet classifi cationrequirements, international conventions or regulations.At the acquisition date, the value of the “vessel” component is thetotal cost price of the asset minus the “overhaul” component; thiscomponent is equal to the cost of the fi rst overhaul of the vessel.B) DepreciationDepreciation is calculated on the basis of the gross value of thecomponent less its residual value.Residual value is the expected selling price (less selling costs) whichthe Group would obtain today from the sale of this asset at the endof its use by the Group.The depreciable amount of the “vessel” component is equal to itsgross value in the consolidated accounts less its residual value. Asthe “overhaul” component has a zero residual value, its depreciableamount corresponds only to its gross value in the consolidatedaccounts.Each component is then depreciated using the straight-line methodover its useful life.Useful life is defi ned according to the expected utility of the asset forBOURBON based on the use planned by the Group.The main useful lives of the “vessel” component used at BOURBONare between 8 and 30 years.The useful life of the “overhaul” component of a vessel depends onthe multi-year maintenance schedule for the vessel.Moreover, if there are indications of impairment, an impairment testis then performed on the group of assets (Cash Generating Unit)by comparing its net book value with its recoverable value. Therecoverable value is generally determined with reference to a marketvaluation. Such valuations are obtained from independent expertsand reviewed by the Group’s management. When the recoverablevalue turns out to be less than the net book value of the asset group,an impairment is recognized.72BOURBON - 2011 Registration Document