4.4 Legal risk - Scor

20.1.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.1.6.1 NOTE 1 - ACCOUNTING PRINCIPLES AND METHODS
(A) GENERAL INFORMATION
SCOR SE (“the Company”) is a European Company (Societas Europaea) domiciled in France and governed by the
provisions of French law relating to European Companies as well as by the French corporate law provisions applicable to
Sociétés Anonymes where this is not contrary to the specific provisions applicable to European Companies. SCOR’s shares
are publicly traded on the Eurolist by Euronext Paris stock market and on the SIX Swiss Exchange (formerly known as the
SWX Swiss Exchange). The principle activities of the Company and its subsidiaries (“the Group” or “SCOR”) are Life and
Non-Life reinsurance.
The consolidated financial statements were presented by Group Management to the Audit Committee. The Management
and the Audit Committee report to the Board of Directors, which authorized the consolidated financial statements on
5 March 2013.
The consolidated financial statements as at and for the year ended 31 December 2012 will be presented for approval at the
Annual General Meeting which will take place on 25 April 2013.
(B) BASIS OF PREPARATION
SCOR’s consolidated financial statements for the years ended 31 December 2012, 2011 and 2010 have been prepared in
compliance with IFRS issued by the International Accounting Standards Board (IASB) as adopted by the European Union
(“EU”) and effective as at 31 December 2012. The term “IFRS” refers collectively to International Accounting Standards
(IAS) and International Financial Reporting Standards (IFRS) and to Interpretations of the Interpretations Committees
(Standing Interpretations Committee (SIC) and IFRS Interpretations Committee (IFRIC)) mandatorily applicable as at
31 December 2012. Refer to Note 1 (D) below for a detail overview on the new and amended International Financial
Reporting Standards adopted by the Group as endorsed by the European Union applicable in 2012 and the standards which
have been issued by the IASB during the period but have not been adopted by the European Union.
Reclassifications
As part of implementing one consistent general ledger across Group entities in 2012, certain general ledger accounts were
remapped at consolidation level. The remapping has not had any material impact on the consolidated financial statements.
Certain reclassifications have been made to 2010 financial information to conform to the current year and 2011 presentation.
The changes are related to the new cost allocation methodology of the Group which was refined in the preparation of
segment information, resulting in a new corporate cost center being created, Group Functions. For further detail refer to
Note 2 – Segment Information.
Use of estimates
The preparation of the consolidated financial statements requires management to make certain judgments, assumptions and
estimates. These affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent
assets and liabilities at the reporting date. Management reviews these estimates and assumptions periodically, based on
past experience and other factors. The actual outcome and results could differ substantially from estimates and assumptions
made. The most material financial statement captions for which the Group uses estimates and assumptions are reinsurance
reserves, receivables and liabilities relating to reinsurance operations, the fair value and impairment of financial instruments,
intangible assets, retirement and other defined benefit plans and deferred taxes.
Allocation of expenses by function
In conformity with IAS 1 - Presentation of Financial Statements, the Group has opted to present expenses by function in the
statement of income. The costs are allocated to four categories (acquisition and administrative expenses, claims settlement
expenses, investment management expenses and other current operating expenses) based on allocation keys which are
determined based on management’s judgment. Hub shared service costs are allocated to the divisions based on a
headcount allocation key.
(C) BASIS OF CONSOLIDATION
All material entities, in which SCOR owns directly or indirectly more than 50% of outstanding voting rights or has otherwise
power of control, are fully consolidated. Control is the authority to direct financial and operational policies in order to obtain
benefits from their operations.
Special Purpose Entities (SPE) are consolidated where the substance of the relationship is that the SPE is controlled by the
Group. The Group sponsors a number of catastrophe bond notes issued by Atlas Special Purpose Vehicles (SPVs). The
SPVs allow the retrocession of catastrophe losses financed by the issuance of catastrophe bonds. In accordance with
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