Vilmorin & Cie - Annual report 2017-2018

Financial INFORMATION 5 ANNUAL REPORT Vilmorin & Cie 150 2017-2018 When considering the work completed during fiscal year 2017- 2018, the group does not anticipate any significant impact on its future financial statements as a result of the application of the standard IFRS 15. IFRS 9 deals with the recognition and measurement of financial assets and on the one hand proposes a new model for amortizing financial assets based on expected credit losses, and at the same time recommendations for recording forward cover that provides for a better indication of the company’s objectives and strategy for managing risks. The group does not anticipate any major impact on the recognition and measurement of financial assets, or on the impairment of financial assets. The new standards, interpretations and amendments to existing standards, adopted by the European Union and applicable to fiscal periods as of July 1, 2019 or later, have not been adopted in advance by Vilmorin & Cie: IFRS 16 “Leases.” IFRS 16 mainly modifies the way in which leases will be presented for the lessee. Indeed, the standard no longer distinguishes between operating leases and finance leases, adopting a single model for the presentation of leases. The group is currently studying any possible impact from the application of these new standards, interpretations and amendments to existing standards. 5- Consolidation methods (IFRS 10, IFRS 11, IAS 27, IAS 28) The financial statements of subsidiaries: are included in the consolidated financial statements as of the date on which control is obtained right up until the date when control ceases, are prepared in accordance with the revised standard IAS 27 “Separate financial statements.” The following rules have been applied: Subsidiaries in an entity controlled directly or indirectly by the group are consolidated by global integration. In accordance with standard IFRS 10 “Consolidated financial statements”, control is defined using the single model based on three cumulative conditions. An investor holds power over an investee when he controls this investee, when he has exposure, or rights, to variable returns from involvement with the investee, and when he has the ability to use his power over the investee to affect the amount his returns. Standard IFRS 11 eliminated the method of proportional integration and henceforth two types of joint arrangement are distinguished: - Joint arrangements qualified as “joint operations” whereby the parties have rights to the assets and obligations for the liabilities, relating to the arrangement. They are recorded in the accounts according to the proportion of assets, liabilities, income and charges controlled by the group. A joint operation may be structured through a distinct vehicle or not. - Joint arrangements qualified as “joint ventures” whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. They are consolidated by the group using the equity method. All internal transactions are eliminated in consolidation, particularly: - reciprocal transactions and accounts, - dividends paid out between consolidated companies, - provisions and write-back of amortization on consolidated securities, - internal margins on inventory, - capital gains or losses on internal disposals. 6- Business combinations (revised IFRS 3) Business combinations are recorded by applying the acquisition method on the acquisition date, which is the date on which control is transferred to Vilmorin & Cie. The revised standard IFRS 3 is applicable to all take-overs as of July 1, 2009. Vilmorin & Cie values goodwill: at the fair value of the consideration transferred, plus the recognized amount of any non-controlling interest rate in the acquiree, plus, if the business combination is carried out in stages, the fair value of any participation previously held in the acquiree, minus the net recognized amount (usually the fair value) of the identifiable assets acquired and liabilities assumed on the acquisition date. If the difference above is negative, the resulting gain is recognized as a bargain purchase in profit or loss. The consideration transferred includes the fair values of the transferred assets, Vilmorin & Cie’s liabilities to the previous owners of the acquiree, and the participating interests issued by Vilmorin & Cie. The consideration transferred also includes the fair value of any consideration and payment rights based on the shares of the acquired company which must be replaced in the business combination (see below). If pre-existing relationships between Vilmorin & Cie and the acquiree are terminated as a result of the business combination, the lower of the two values, between the termination value (cited in the contract) and the value of the non- marketable portion, is deducted from the consideration transferred and is recognized as other costs. 5.1. Consolidated Financial Statements