VINCI - 2005 annual report

(h) Reclassification under operating profit of exceptional impairment loss
expense of €25 million and amortisation of goodwill relating to assets
with a finite useful life for €8 million.
1.2 NET FINANCIAL INCOME / (EXPENSE)
Net financial expenses were €3 million under IFRS against €24
million under French GAAP. This difference is the result of the impact
of the reclassification and restatements detailed in the table below:
CONSOLIDATED FINANCIAL STATEMENTS
(i) Reclassification under operating profit of impairment of WFS market
shares, considered as goodwill under IFRS, recognised under exceptional
income / (expense) under French GAAP.
(in € millions) 2004
Notes Cost of Other financial Total
borrowing income
and expenses
Net financial income / (expense) under French GAAP (151) 127 (24)
Restatements:
Effect of applying the amortised cost method to OCEANE bonds (a) (15) – (15)
Effect of applying the amortised cost method to liabilities
of infrastructure concessions (3) – (3)
Adjustment of capitalised borrowing costs on infrastructure
concession assets following application of the amortised cost method 6 – 6
Other (1) (2) (3)
Total (13) (2) (15)
Reclassifications:
Capitalised borrowing costs (b) (77) 77 0
Cost of discounting retirement benefit obligations (c) – (24) (24)
Exceptional income and expenses related to financial assets (d) – 60 60
Total (77) 113 36
Net financial income / (expense) under IFRS (241) 238 (3)
Restatements
(a) Under French GAAP, bond issuance costs and redemption premiums
were amortised on a straight-line basis over the period of the loan.
Provisions were therefore taken at each balance sheet date in respect of
the redemption premiums of the OCEANE bonds issued by VINCI. Under
IFRS, issuance costs and redemption premiums are amortised using the
amortised cost method which consists in calculating the effective interest
rate of the debt taking account of the issuance costs, redemption premiums
and conversion options. This restatement results in the recognition of a
supplementary expense of €15 million in respect of 2004.
Reclassifications
(b) The capitalised borrowing costs shown as a reduction of borrowing
costs in the French GAAP published financial statements are now shown
under other financial income and expenses.
(c) Reclassification under financial income / (expense) of the cost of
discounting provisions for retirement benefit obligations, recognised in
operating income under French GAAP (see note 1.1 (f)).
(d) Reclassification under financial income / (expense) of exceptional
items related to the disposal of financial assets for €24 million and of
a reversal of the Toll Collect provision by Cofiroute for €36 million,
recognised in exceptional income / (expense) under French GAAP.
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