Financial Reporting - Rexel

When the calculation results in plan assets exceeding the Group’s liabilities, the recognized asset is limited
to the net total of any unrecognized actuarial losses and past service costs and the present value of any
currently available future refunds from the plan or reductions in future contributions to the plan.
The current and past service costs are presented in the income statement as part of the personnel expense.
The interest expenses (income) relating to the unwinding of the discounting of the defined benefit obligation
and the expected return on plan assets are presented in financial income and expenses.
Other long-term benefits
Long-term benefits mainly include jubilees or long service leaves. The Group’s net obligation in respect of
long-term benefits, other than post-employment plans, is the amount of future benefit that employees have
earned in return for their service in the current and prior periods. The value of the obligation is determined
using the projected unit credit method. This amount is discounted at the rate based on high quality corporate
bonds with maturity dates close to those of the Group’s obligations prevailing on the balance sheet date.
Actuarial gains and losses are immediately recognized in the income statement.
2.15 | Share-based payments
Free shares and stock option programs allow the Group employees to acquire shares of the Group entities.
The fair value of options granted is recognized as a personnel expense with a corresponding increase in
other reserves in equity (when the plan qualifies as equity-settled) over the period during which the
employees become unconditionally entitled to the options (the vesting period). The expense is based on
Group estimates of the acquired equity instruments in accordance with conditions of granting.
The fair value is measured at grant date using a Black & Scholes model or a binomial model in accordance
with the characteristics of the plans.
The proceeds received net of any directly attributable costs are recognized as an increase in share capital
(for the nominal value) and share premium when equity instruments are exercised.
2.16 | Provisions
A provision is recognized in the balance sheet when the Group has a present legal or constructive obligation
as a result of a past event, when it is probable that an outflow of economic benefits will be required to settle
the obligation and when the amount can be estimated reliably.
If the effect of time value is material, provisions are determined by discounting the expected future cash
flows at a rate that reflects current market assessments of the time value of money and, when appropriate,
the risks specific to the liability.
Provision for restructuring
A restructuring is a program that is planned and controlled by management that materially changes either the
scope of the business or the manner in which that business is conducted.
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring
plan, and the restructuring either has commenced or has been announced publicly. Future operating losses
are not provided for. Certain restructuring expenses are presented in “Other expenses” (see note 2.18).
Restructuring costs principally include personnel costs (severance payments, early retirement costs, notice
time not worked), branch closure costs, and indemnities for the breach of non-cancellable agreements.
Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived from a contract are
lower than the unavoidable cost of meeting its obligations under the contract.
Provisions for disputes and litigations
Provisions for disputes and litigation include estimated costs for risks, disputes, litigation and third party
claims, and the probable costs associated with warranties given by the Group in the context of the disposal
of non-current assets or subsidiaries.
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