Vilmorin & Cie - Annual report 2017-2018

5 ANNUAL REPORT Vilmorin & Cie 149 2017-2018 Note 1: Accounting methods and principles in IFRS standards 1- General context and declaration of compliance These financial statements present the consolidated financial statements in accordance with the international accounting standards (IFRS standards) published by the International Accounting Standards Board (IASB) and with the interpretations of the IFRS published by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB, as applied by the European Union on June 30, 2018 (website: http://ec.europa.eu ). The consolidated financial statements were approved by the Board of Directors on October 17, 2018 and will be submitted for approval to the Annual General Meeting of December 7, 2018. 2- Basis of evaluation used to establish the consolidated financial statements The consolidated financial statements have been established using the historical cost convention, with the exception of certain categories of assets and liabilities, in compliance with IFRS rules. The categories concerned are mentioned in the following Notes. 3- The use of estimates In order to establish its financial statements, the Executive Committee of Vilmorin & Cie must carry out a number of estimates and hypotheses that affect the book value of the assets and liabilities, the income and the charges, and also the information provided in the Notes. The Executive Committee of Vilmorin & Cie carries out these estimates and assessments on an ongoing basis, taking into account its experience and various other factors deemed to be reasonable that form the basis of these assessments. The figures appearing in future financial statements are liable to differ from these estimates, depending on the evolution of these hypotheses or different conditions. The main significant estimates made by the Executive Committee of Vilmorin & Cie in particular concern the evolution of commitments to employees, goodwill, other intangible fixed assets and provisions. 4- Accounting treatment adopted in the absence of an IFRS standard or IFRIC interpretation with regard to certain operations In the absence of an IFRS standard or IFRIC interpretation, Vilmorin & Cie has chosen to adopt the following accounting treatment, pending any possible standards or interpretations to come. 4.1 - Accounting of put options granted to certain minority shareholders Vilmorin & Cie may grant, to minority shareholders of certain of its subsidiaries consolidated by global integration, commitments to buy back their minority stakes. These commitments may take the form of a put option or a firm commitment to buy the stakes at a pre-fixed date. In IFRS standards, until there is a specific IFRIC interpretation or IFRS standard, Vilmorin & Cie has decided to apply provisionally the following accounting treatment, referred to as “accelerated vesting”: At initial recording in the accounts, the commitment to buy back a minority stake is recorded as a financial debt at the discounted value of the price of the option or firm commitment to buy back the stake, in return for the derecognition of minority interests, and for the balance, for the goodwill. Any ultimate variation in the value of the commitment is recorded in the income statement for any transactions occurring after the application of the revised standard IFRS 3. Where necessary, when the commitment and its subsequent variations are first recorded in the accounts, the anticipated loss on the acquisition cost is recorded in “Variation in commitments to buy back minority stakes.” When the commitment reaches maturity, if there is no acquisition, previous recordings are cancelled. If the acquisition materializes, the amount recorded as a financial debt is cancelled out by the disbursement for the acquisition of the minority stake. 4.2 - Application and interpretation of standards and regulations The standards, interpretations and amendments to existing standards, adopted by the European Union and applicable to fiscal periods as of July 1, 2017 had no impact on the group’s financial statements: The new standards, interpretations and amendments to existing standards, adopted by the European Union and applicable to fiscal periods as of July 1, 2018 have not been adopted in advance by Vilmorin & Cie: IFRS 15 “Revenues from Contracts with Customers”, and the IFRS 15 amendment concerning “Clarifications to IFRS 15,” IFRS 9 “Financial Instruments.” IFRS 15 proposes a five-step model to recognize sales and therefore determine revenue to be recorded, the amount and the date from when it should be taken into account. Vilmorin & Cie has measured the impact of IFRS 15 on the group’s revenue with input from its key correspondents in its operating companies. 5.1. Consolidated Financial Statements Financial INFORMATION