Vilmorin & Cie - Annual report 2017-2018

5 ANNUAL REPORT Vilmorin & Cie 151 2017-2018 When rights to share-based payments that are replaced by rights (replacement rights) owned by employees at the acquiree (the acquiree’s rights) relate to past services, part of the market- based assessment of the replacement right is included in the consideration transferred. Insofar as services are also necessary in the future, the difference between the amount included in the consideration transferred and the market-based assessment of the value of the replacement rights is treated as a replacement cost after the business combination. A contingent liability of the acquiree is only taken into consideration in the business combination when the liability represents a current commitment and derives from past events, and if its fair value can be reliably measured. Vilmorin & Cie values non-controlling interests pro rata at the date of acquisition, either at their fair value or according to their interests in the acquiree’s identifiable assets. Transaction costs incurred by Vilmorin & Cie arising in connection with a business combination (brokerage costs, judicial costs, due diligence costs, costs of consultants and experts, etc.) are recognized immediately as they occur. Acquisitions of participations which do not transfer control are recorded as transactions with the owners and consequently no goodwill results from such transactions. Adjustments of the non- controlling interests for transactions which do not lead to losses of control are determined on the basis of the share of the subsidiary’s net assets. 7- Operating segments IFRS standard 8 “Operating segments” defines an operating segment as the component of an entity: that engages in business activities from which it may earn revenues and incur expenses, whose operating results are reviewed regularly by the entity’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance and, for which discrete financial information is available. 8- Converting statements expressed in foreign currencies (IAS 21) Vilmorin & Cie’s financial statements are presented in euros. Balance sheets of companies whose functional currency is not the euro are converted into euros at the exchange rate in force at close, and their income statements and cash flows by applying the exchange rate in force at the date of the transactions. Resulting translation differences are recorded in the equity on the line “Currency translations” for the share of the controlling company, and on the line “Minority interests” for the minorities’ share. Goodwill and adjustments in fair value originating in the acquisition of a foreign entity are considered as the assets and liabilities of the foreign entity. They are therefore expressed in the functional currency of the entity and translated at the closing rate for the year. At the end of the fiscal year, monetary assets and liabilities expressed in foreign currencies are translated at the exchange rate in force at the closing rate for the year. The resulting exchange differences are recorded in the income statement (in “Other financial profits and costs”). Translation differences for financial instruments expressed in foreign currencies and corresponding to net forward investment in a foreign subsidiary are recorded in equity in the line “Currency translation.” They are recorded in the income statement when the activity is taken out of the foreign country. 9- Intangible fixed assets (IAS 38) Other intangible fixed assets are recorded at acquisition cost, and other intangible fixed assets created internally are recorded at cost value. When their duration of use is defined, intangible assets are amortized over their expected duration of use by Vilmorin & Cie. This duration is determined for each individual case depending on the nature of the items included in this line. When their duration of use is undefined, intangible fixed assets are not amortized, but they are submitted to systematic annual value loss tests. Consequently, intangible fixed assets with a defined duration of use are valued at cost price less amortization and any value loss, whereas intangible fixed assets with an undefined duration of use are valued at cost price less the aggregate of value losses. The main categories of other intangible fixed assets at Vilmorin & Cie are as follows: 9.1 - Development costs Development costs, net of any associated tax relief on research, are recorded as intangible fixed assets when the activation conditions meet all five of the following conditions: The projects are clearly identified and the costs concerned are treated individually and are evaluated in a reliable manner. 5.1. Consolidated Financial Statements Financial INFORMATION