sain t-gobain annu al report 2008 annual report
sain t-gobain annu al report 2008 annual report
sain t-gobain annu al report 2008 annual report
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Notes<br />
to the consolidated<br />
financi<strong>al</strong> statements<br />
134<br />
NOTE 1<br />
Accounting principles and policies<br />
Basis of preparation<br />
The consolidated financi<strong>al</strong> statements of Compagnie de<br />
Saint-Gobain and its subsidiaries (“the Group”) have been<br />
prepared in accordance with the Internation<strong>al</strong> Financi<strong>al</strong><br />
Reporting Standards (IFRS) adopted for use in the European<br />
Union at December 31, <strong>2008</strong>.<br />
IFRS were applied retrospectively in the opening b<strong>al</strong>ance sheet<br />
at the transition date (January 1, 2004), with the exception of<br />
certain option<strong>al</strong> or mandatory exemptions provided for under<br />
IFRS 1 – First-time Adoption of Internation<strong>al</strong> Financi<strong>al</strong><br />
Reporting Standards. The Group elected to apply IAS 32 and<br />
IAS 39 relating to financi<strong>al</strong> instruments and IFRS 2 relating<br />
to share-based payments as of January 1, 2004.<br />
The accounting policies applied are consistent with those<br />
used to prepare the financi<strong>al</strong> statements for the years ended<br />
December 31, 2006 and 2007. The consolidated financi<strong>al</strong><br />
statements have been prepared using the historic<strong>al</strong> cost<br />
convention, except for certain assets and liabilities that<br />
have been measured using the fair v<strong>al</strong>ue model as explained<br />
in these notes.<br />
The standards, interpretations and amendments to published<br />
standards applicable for the first time in <strong>2008</strong> (see the table<br />
below) do not have a materi<strong>al</strong> impact on the Group’s consolidated<br />
financi<strong>al</strong> statements.<br />
The Group has not early adopted any new standards, interpretations<br />
or amendments to published standards that are applicable<br />
for financi<strong>al</strong> years beginning on or after January 1, 2009<br />
(see table below). Accordingly, IFRS 8 – Operating Segments<br />
has not been applied. Application of this standard would not<br />
have any impact on the presentation of the disclosures in<br />
Note 32.<br />
The Group has not early adopted IFRIC 14, that was adopted<br />
by the Internation<strong>al</strong> Accounting Standards Board (IASB) on<br />
January 1, <strong>2008</strong> but has been adopted for use in the European<br />
Union from January 1, 2009. Application of this interpretation<br />
would lead to a €138 million reduction in equity after tax.<br />
With the exception of IFRIC 14, the consolidated financi<strong>al</strong><br />
statements have been prepared in accordance with <strong>al</strong>l the<br />
standards issued by the IASB.<br />
These consolidated financi<strong>al</strong> statements were adopted by the<br />
Board of Directors on February 19, 2009 and will be submitted<br />
to the Shareholders’ Meeting for approv<strong>al</strong>. They are expressed<br />
in millions of euros.<br />
Estimates and assumptions<br />
The preparation of consolidated financi<strong>al</strong> statements in<br />
compliance with IFRS requires management to make estimates<br />
and assumptions that affect the <strong>report</strong>ed amounts of<br />
assets and liabilities and the disclosure of contingent assets<br />
and liabilities at the date of the financi<strong>al</strong> statements, as well<br />
as the <strong>report</strong>ed amounts of income and expenses during the<br />
period. These estimates and assumptions are based on past<br />
experience and on various other factors, considering the sharp<br />
deterioration in the economic and financi<strong>al</strong> environment,<br />
which makes assessing the business outlook difficult. Actu<strong>al</strong><br />
amounts may differ from those obtained through the use of<br />
these estimates and assumptions.<br />
The main estimates and assumptions described in these notes<br />
concern the measurement of employee benefit obligations,<br />
provisions for other liabilities and charges, asset impairment<br />
tests, deferred taxes, share-based payments and financi<strong>al</strong><br />
instruments. Estimates are revised at the b<strong>al</strong>ance sheet date<br />
and tests are carried out where appropriate to assess their<br />
sensitivity to changes in assumptions.<br />
Saint-Gobain – Financi<strong>al</strong> Report <strong>2008</strong>