Financial Reporting - Rexel
Financial Reporting - Rexel
Financial Reporting - Rexel
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These provisions also include costs of personnel disputes and tax litigation. A provision is not made for tax<br />
assessments received or in course of preparation when it is considered that the assessment is not justified or<br />
when there is a reasonable probability that the Group will succeed in convincing the authority of its position.<br />
Any accepted assessment is recorded as a liability when the amount can be reasonably estimated.<br />
2.17 | Sales<br />
Revenue arising from the sale of goods is presented in sales in the income statement. Sales are recognized<br />
when the significant risks and rewards of ownership have been transferred to the buyer, which usually occurs<br />
with the delivery or shipment of the product.<br />
Sales are recognized net of customer rebates and discounts.<br />
The Group may enter into direct sales (as opposed to warehouse sales) whereby the product is sent directly<br />
from the supplier to the customer without any physical transfer to and from the Group’s warehouse. The<br />
Group is acting as principal and therefore recognizes the gross amount of the sale transaction.<br />
2.18 | Other income and other expenses<br />
Operating income and expenses as a result of abnormal or unusual events are included as separate line<br />
items “Other income” and “Other expenses”. These line items include in particular, irrespective of their<br />
amount, gains and losses on asset disposals, asset depreciation, expenses arising from the restructuring or<br />
integration of acquired companies, separation costs, acquisition costs from business combinations and other<br />
items such as significant disputes. These items are presented separately in the income statement in order to<br />
allow <strong>Rexel</strong>’s Management Board, acting as Chief operating decision maker within the meaning of IFRS 8<br />
"Operating Segments", to assess the recurrent performance of the operating segments.<br />
2.19 | <strong>Financial</strong> expenses (net)<br />
<strong>Financial</strong> expenses (net) comprise interest payable on borrowings calculated using the effective interest rate<br />
method, dividends on preference shares classified as liabilities, interest receivable on funds invested,<br />
dividend income, foreign exchange gains and losses, and gains and losses on hedging instruments that are<br />
recognized in profit or loss (see note 2.10.5).<br />
Interest income is recognized in profit or loss as it accrues, using the effective interest rate method. Dividend<br />
income is recognized in profit or loss on the date the entity’s right to receive payment is established which in<br />
the case of quoted securities is the ex-dividend date. The interest expense component of finance lease<br />
payments is recognized in profit or loss using the effective interest rate method.<br />
2.20 | Income tax<br />
Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is<br />
recognized in profit or loss except to the extent that it relates to items recognized directly equity, in which<br />
case it is recognized in equity.<br />
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or<br />
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous<br />
years.<br />
Deferred tax is provided using the balance sheet liability method, providing for temporary differences<br />
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used<br />
for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for<br />
tax purposes, differences relating to investments in subsidiaries to the extent that they will probably not<br />
reverse in the foreseeable future and the initial recognition of assets or liabilities in a transaction that is not a<br />
business combination and that affects neither accounting nor taxable profit. The amount of deferred tax<br />
provided is based on the expected manner of realization or settlement of the carrying amount of assets and<br />
liabilities, using tax rates enacted or substantively enacted at the balance sheet date.<br />
A net deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be<br />
available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no<br />
longer probable that the related tax benefit will be realized.<br />
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