to download the 2012 registration document. - Groupe M6

2012 FINANCIAL STATEMENTS AND RELATED NOTES- co-production rights awaiting receipt of technical acceptance or commercialisation visa.AUDIOVISUAL RIGHTSAudiovisual rights, comprising rights to films for movie theatre distribution, as well as television andvideographic rights, purchased with or without a minimum guarantee, in view of their commercialisation(distribution, trading), produced or co-produced are classified as an intangible asset in compliance withIAS 38 – Intangible assets.The method of amortisation of an asset should reflect the pattern according to which the benefitsgenerated by the asset are consumed. That is why audiovisual rights:- are amortised according to the pattern of revenues generated, compared to the total estimatedrevenues, and as a minimum are amortised over the life of the contract, subject to the followinglimits:• 3 years if the company is a distributor of these rights;• 5 years if the company is a dealer in these rights;• 15 years if the company is a producer of these rights;• Amortisation schedules are consistent with industry practices and correspond to thetimeframe during which audiovisual rights are most likely to generate revenue and cash flow.- are subject, in accordance with IAS 36 – Impairment of assets (see Note 4.7) to an impairment test,which could lead to the recognition of impairment should the book value of the right exceed itsrecoverable value.COPRODUCTION SHARE OF FEATURE FILMS, DRAMA AND OTHER COSTSCo-production costs are also capitalised as other intangible assets and are amortised first and foremostas revenue is generated. Assets are amortised on a straight-line basis over 3 years if expected revenue isspread over more than 3 years. Lastly, in the case that revenue is insufficient in light of the book value ofthe production, the asset’s full value is immediately amortised.In application of IAS 20 – Accounting for government grants and disclosure of government assistance,grants received from the Centre National de Cinématographie (CNC) are accounted for as a reduction inthe acquisition cost of financed co-production assets, and are consequently accounted for in the incomestatement according to the pattern of consumption of the expected economic benefits of the coproductionsas previously defined.ACQUISITION COST OF SPORTS SCLUB PLAYERSIn application of IAS 38 – Intangible assets, transfer fees of sports club players are capitalised asintangible assets at their acquisition cost and are amortised on a straight-line basis over the length of theircontracts. The term of these contracts may vary but it is generally from 1 to 5 years.The recoverable value is also assessed in compliance with IAS 36 – Impairment of assets (see Note 4.7).COMPUTER SOFTWARE AND E-BUSINESS WEBSITESComputer software purchased or internally developed is reported at acquisition or production cost andamortised on a straight-line basis over its period of use, which does not exceed seven years.Under IAS 38 – Intangible assets, development costs of “active” websites must be capitalised asintangible assets from the time the Company can demonstrate the following:- its intention and financial and technical capacity to complete the development project;- the likelihood that future economic benefits attributable to the development costs will flow to theCompany;- and the cost of this asset can be reliably measured.M6 GROUP - 2012 REGISTRATION DOCUMENT - 165