financial report and registration document 2011 - Groupe SEB

5 Notes
Consolidated fi nancial statements
to the consolidated fi nancial statements
Maintenance and repair costs are expensed as incurred.
The main useful lives are as follows:
� buildings: 10 to 40 years;
� plant and machinery: 10 years;
� offi ce equipment: 3 to 10 years;
� vehicles: 4 to 5 years;
� tooling: 1 to 5 years.
Each signifi cant part of an item of property, plant and equipment with a useful
life that is different from that of the asset to which it belongs is depreciated
separately. Useful lives are reviewed at regularly intervals and the effect of
any adjustments – corresponding to a change in accounting estimates – is
applied prospectively.
No items of property, plant or equipment have been revalued.
In accordance with IAS 17 – Leases, fi nance leases that transfer substantially
all the risks and rewards incidental to ownership of an asset to the lessee are
recognised in property, plant and equipment for an amount corresponding
to the lower of the fair value of the leased asset and the present value of the
minimum lease payments. A liability for the same amount is recorded under
“Finance lease liabilities”.
1.4.3. Impairment of non-current assets
In accordance with IAS 36 – Impairment of Assets, the Group assesses
at the end of each reporting period whether there is any indication that its
property, plant and equipment and intangible assets may be impaired. If any
such indication exists, the assets are tested for impairment. Assets with an
indefi nite useful life – corresponding in the case of Groupe SEB to goodwill
and trademarks – are tested for impairment at least once a year, irrespective
of whether there is any indication of impairment.
Assets with a fi nite useful life are tested whenever events or circumstances
indicate that their carrying amount may not be recovered.
Impairment tests are performed at the level of each Cash-Generating Unit
(CGU). A CGU is defi ned as the smallest identifi able group of assets that
generates cash infl ows that are largely independent of the cash infl ows
from other assets or groups of assets. An impairment loss is recognised
for any excess of an asset’s carrying amount over its recoverable amount.
Recoverable amount corresponds to the higher of the asset’s fair value less
costs to sell and its value in use, calculated using the discounted cash fl ows
method. The impairment loss is allocated to reduce the carrying amount of
goodwill and then prorata to the other assets of the CGU based on their
respective carrying amounts.
The capitalised amount of development projects in progress is also tested
for impairment.
Impairment losses on CGUs and on assets with an indefi nite useful life are
recorded in “Other operating income and expense”.
At Groupe SEB, CGUs correspond to individual production sites, broken
down where appropriate by product family. The assets allocated to
each CGU correspond mainly to tooling and other manufacturing assets
(primarily buildings and machinery). Marketing subsidiaries and integrated
manufacturing and sales entities are each treated as separate CGUs, but
marketing subsidiaries that share resources are combined in a single CGU.
Impairment losses recognised for non-fi nancial assets other than goodwill are
reviewed at each annual and interim period-end and adjusted as necessary.
1.4.4. Financial instruments
Financial instruments are accounted for in accordance with IAS 39 – Financial
Instruments: Recognition and Measurement.
Financial assets and liabilities are recognised in the balance sheet when
the Group becomes a party to the contractual provisions of the instrument.
They are initially recognised at cost, corresponding to the fair value of the
consideration paid or received plus external transaction costs that are
directly attributable to the acquisition or issue of the fi nancial asset or
fi nancial liability.
A) FINANCIAL ASSETS
Financial assets consist of shares in subsidiaries and affi liates, as well as
operating receivables, debt securities and other cash equivalents classifi ed
as current assets.
Available-for-sale fi nancial assets are assets that are intended to be held
for an indefi nite period but which may be sold in response to changes in
market interest rates or liquidity needs. They comprise investments in nonconsolidated
companies.
At each period-end, they are measured at fair value and the resulting
unrealised gains or losses are recognised directly in equity. When the assets
are sold or there is objective evidence of impairment, the cumulative gains
and losses previously recognised in equity are reclassifi ed to profi t.
Held-to-maturity investments are fi nancial assets with a fi xed maturity that
the Group has the positive intention and ability to hold to maturity. They are
measured at amortised cost, determined by the effective interest method.
B) FINANCIAL LIABILITIES
Financial liabilities comprise borrowings and other fi nancing, including bank
overdrafts and operating liabilities.
Borrowings and other fi nancial liabilities are measured at amortised cost,
determined by the effective interest method.
When interest rate risks on fi nancial liabilities are hedged by swaps qualifying
as cash fl ow hedges, the swaps are also recognised in the balance sheet at
fair value. The effective portion of changes in their fair value is recognised
directly in equity and the ineffective portion is recognised in profi t.
C) DERIVATIVE INSTRUMENTS
Market risks (interest rate, currency and commodity price risks) are hedged,
generally through the use of derivative instruments.
In accordance with IAS 32 and IAS 39, derivative instruments are measured
at fair value.
The accounting treatment of changes in fair value depends on the future use
of the derivative and the resulting accounting classifi cation.
86 GROUPE SEB Financial Report and Registration Document 2011