REGISTRATION DOCUMENT - Bourbon

4NotesCONSOLIDATED FINANCIAL STATEMENTSto the consolidated financial statements1.5.15 Financial liabilitiesFinancial liabilities include borrowings and fi nancial debts, tradepayables, derivative instruments and other current and non-currentliabilities.All borrowings are initially recorded at fair value less directlychargeable transaction costs.After the initial accounting, interest-bearing loans are measured atamortized cost, using the effective interest rate method.Profi ts and losses are recorded on the income statement when thedebts are derecognized, and through the amortized cost mechanism.Derivative instruments are carried at their fair value at the closingdate. The accounting methods for derivative instruments aredescribed in note 1.5.19.1.5.16 Finance leasesAssets held under fi nance leases are recognized as assets of theGroup, i.e. when in substance, the contract grants to the Groupmost of the risks and benefi ts related to the asset. These assetsare measured at the fair value or, if lower, at the present value ofthe minimum lease payments. The asset is depreciated using theGroup’s depreciation methods as defi ned in note 1.5.6.1.5.17 RevenueRevenue is recognized when it is probable that the future economicbenefi ts will fl ow to the Group and when the amount of revenue canbe measured reliably. Revenue is measured at the fair value of theconsideration received, excluding discounts, rebates, other taxes onsales and customs duties.Income from ordinary activities includes, in particular, charteringrevenues and related services as well as assistance services.1.5.18 Current income tax and deferred taxThe income tax expense for the year includes:3 the current income tax expense less tax credits and tax lossesactually used;3 deferred tax, booked in the consolidated fi nancial statementsbased on the tax situation of each company.Deferred taxes result from:3 temporary differences between taxable profi t and accountingprofi t,3 consolidation restatements and eliminations,3 and tax defi cits that can be carried forward, which are likely tobe recovered in the future.These taxes are calculated and adjusted using the balance sheetliability method in its broadest sense. Deferred tax assets andliabilities are not discounted.Deferred tax and current income tax relating to items booked directlyas shareholders’ equity are recognized as shareholders’ equity andnot in the income statement.1.5.19 Derivative instruments and hedge accountingThe Group uses derivative instruments such as forward exchangecontracts, interest rate swaps, cross currency swaps and exchangeoptions to manage its exposure to movements in interest rates andforeign exchange rates. These derivative instruments are initiallyrecognized at fair value on the date on which the contracts take effectand are subsequently measured at fair value. Derivative instrumentsare booked as assets when the fair value is positive and as liabilitieswhen the fair value is negative.All gains and losses from changes in the fair value of the derivativeinstruments which are not classifi ed as hedging instruments arerecognized directly in the income statement for the year.The fair value of buying forward exchange contracts is calculated byreference to the current forward exchange rates for contracts withsimilar maturities. The fair value of interest rate swaps is generallydetermined using rate curves based on the market interest ratesobserved on the closing date.For the purposes of hedge accounting, hedges are classifi ed as:3 fair value hedges when they hedge the exposure to changes in thefair value of a recognized asset or liability, or a fi rm commitment(except for the exchange risk);3 cash fl ow hedges when they hedge the exposure to variabilityin cash fl ows that is attributable either to a specifi c riskassociated with a recognized asset or liability, or to a highlyprobable forecasted transaction or to the exchange risk on a fi rmcommitment;3 hedges of a net investment in a foreign operation.The hedge on the foreign currency risk of a fi rm commitment isrecognized as a cash fl ow hedge.At inception of a hedge relationship, the Group formally designatesand documents the hedge relationship to which the Group wantsto apply the hedge accounting and the objective desired for riskmanagement hedge strategy. The documentation includes theidentifi cation of the hedging instrument, the item or transactionhedged, the nature of the risk being hedged and how the Groupwill assess the effectiveness of the hedging instrument in offsettingthe exposure to the changes in fair value of the item hedged or cashfl ows attributable to the hedged risk. The Group expects that thehedge will be highly effective in offsetting changes in fair value or76BOURBON - 2011 Registration Document