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 parent company<br />
financi<strong>al</strong> statements<br />
The financi<strong>al</strong> statements cover the twelve-month period<br />
from January 1 to December 31, <strong>2008</strong>.<br />
The following notes form an integr<strong>al</strong> part of the financi<strong>al</strong><br />
statements.<br />
These financi<strong>al</strong> statements were approved by the Board<br />
of Directors on February 19, 2009.<br />
NOTE 1<br />
Accounting principles and methods<br />
The financi<strong>al</strong> statements of Compagnie de Saint-Gobain have<br />
been drawn up in accordance with the accounting principles<br />
set out in the 1999 French Chart of Accounts.<br />
They include the accounts of the Company’s German branch.<br />
Intangible assets<br />
Purchased goodwill that is not leg<strong>al</strong>ly protected is amortized<br />
over 25 years. Other intangible assets consist mainly of<br />
computer software. They are measured at cost and amortized<br />
over a period of three or four years.<br />
Property and equipment<br />
Property and equipment are stated at cost (purchase price<br />
plus incident<strong>al</strong> expenses), except for assets acquired prior<br />
to December 31, 1976 which have been rev<strong>al</strong>ued.<br />
They are depreciated over their estimated useful lives using<br />
the straight-line or declining-b<strong>al</strong>ance method. The most<br />
commonly used useful lives are as follows:<br />
Buildings 40 to 50 years Straight-line<br />
Improvements and additions 12 years Straight-line<br />
Fixtures and fittings 5 to 12 years Straight-line<br />
Office furniture 10 years Straight-line<br />
Office equipment 5 years Straight-line<br />
Vehicles 4 years Straight-line<br />
Computer equipment 3 years Straight-line<br />
or decliningb<strong>al</strong>ance<br />
Investments in subsidiaries and affiliates,<br />
other investment securities and other financi<strong>al</strong><br />
investments<br />
On initi<strong>al</strong> recognition, investments in subsidiaries and<br />
affiliates are stated at cost excluding any incident<strong>al</strong> expenses.<br />
They are subsequently measured at the lower of cost and fair<br />
v<strong>al</strong>ue. Fair v<strong>al</strong>ue is estimated at each b<strong>al</strong>ance sheet date based<br />
on the Company’s equity in the underlying net assets<br />
and the proportion of consolidated net assets represented<br />
by the investment. Specific impairment tests may be<br />
performed on a case-by-case basis, to determine the net<br />
present v<strong>al</strong>ue of future cash flows, excluding interest expense<br />
but after tax, based on business plans or long-term budget<br />
projections. No unre<strong>al</strong>ized capit<strong>al</strong> gain is recorded if fair v<strong>al</strong>ue<br />
exceeds cost, and unre<strong>al</strong>ized gains and losses are not offset.<br />
Compagnie de Saint-Gobain shares held by the Company<br />
at year-end for <strong>al</strong>location upon exercise of stock options<br />
are recorded in the b<strong>al</strong>ance sheet under “Other investment<br />
securities”. They are carried at the lower of cost, market price<br />
or the option exercise price when the exercise of the options<br />
is probable.<br />
Receivables<br />
Receivables are stated at the lower of their nomin<strong>al</strong> v<strong>al</strong>ue<br />
and recoverable amount.<br />
Marketable securities<br />
Marketable securities mainly include units in money-market<br />
funds (SICAV) and are stated at the lower of cost and market.<br />
Foreign currency transactions<br />
Income and expenses in foreign currencies are recorded<br />
at the exchange rate prevailing on the transaction date.<br />
Receivables, payables and bank b<strong>al</strong>ances in foreign currencies<br />
are converted at the year-end exchange rate, <strong>al</strong>ong<br />
with the related hedging instruments, and the differences<br />
arising on translation are recorded in the b<strong>al</strong>ance sheet<br />
under “Translation gains” or “Translation losses”. Provisions<br />
are booked for any translation losses that are not hedged.<br />
NOTES THE PARENT COMPANY FINANCIAL STATMENTS<br />
191<br />
Saint-Gobain – Financi<strong>al</strong> Report <strong>2008</strong>