2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 1.5.6.2. Intangible assetsIntangible assets acquired separately by the Group are measured atcost and those acquired in business combinations are measured atfair value. Intangible assets consist mainly of purchased software,software developed for internal use, trademarks, patents and leasepremiums. Trademarks that are created and developed internally arenot recognised on the balance sheet. Intangible assets are amortisedon a straight-line basis over their estimated useful lives. Developmentcosts are amortised over three years and software over three to tenyears. Intangible assets with an indefinite useful life (including leasepremiums and purchased trademarks) are not amortised, but are testedfor impairment at each year-end or whenever there is an indicationthat their carrying amount may not be recovered.An intangible asset is derecognised on disposal or when no futureeconomic benefits are expected from its use or disposal. The gain orloss arising from the derecognition of an intangible asset is determinedas the difference between the net sale proceeds, if any, and thecarrying amount of the asset. It is recognised in profit or loss (otheroperating income or expense) when the asset is derecognised.Residual values, useful lives and amortisation methods are reviewedat each year-end and revised prospectively if necessary.Note 1.5.7. Property, plant and equipmentProperty, plant and equipment are measured at cost less accumulateddepreciation and any accumulated impairment losses.Subsequent expenditures are recognised in assets if they satisfythe recognition criteria in IAS 16. The Group examines these criteriabefore making expenditure.Land is not depreciated. All other items of property, plant andequipment are depreciated on a straight-line basis over their expecteduseful lives without taking into account any residual value. The mainuseful lives are as follows:Asset categoryDepreciationperiod(in years)Land -Buildings (shell) 40Roof waterproofing and shell fire protectionsystems 15Land improvements 10 to 20Building fixtures and fittings 5 to 10Technical installations, machinery andequipment 5 to 12Computer equipment 3 to 5“Roofing and shell fire protection systems” are classified as separateitems of property, plant and equipment only when they are installedduring major renovation projects. In all other cases, they are part ofthe building.An item of property, plant and equipment is derecognised on disposalor when no future economic benefits are expected from its use ordisposal. The gain or loss arising from the derecognition of an asset isdetermined as the difference between the net sale proceeds, if any, andthe carrying amount of the asset. It is recognised in profit or loss (otheroperating income or expense) when the asset is derecognised.Residual values, useful lives and depreciation methods are reviewedat each year-end and revised prospectively if necessary.Note 1.5.8. Finance leasesLeases that transfer substantially all the risks and rewards of ownershipto the lessee are classified as finance leases. They are recognisedin the consolidated balance sheet at the inception of the lease atthe fair value of the leased asset or, if lower, the present value of theminimum lease payments.Leased assets are accounted for as if they had been acquired throughdebt. They are recognised as assets (according to their nature) witha corresponding amount recognised in financial liabilities.Leased assets are depreciated over their expected useful life in thesame way as other assets in the same category, or over the leaseterm if shorter, unless the lease contains a purchase option and it isreasonably certain that the option will be exercised.Finance lease obligations are discounted and recognised in the balancesheet as a financial liability. Payments made under operating leasesare expensed as incurred.Note 1.5.9. Borrowing CostsBorrowing costs that are directly attributable to the acquisition,construction or production of an asset that necessarily takes asubstantial period of time to get ready for its intended use or sale(typically more than six months) are capitalised in the cost of thatasset. All other borrowing costs are recognised as an expense in theperiod in which they are incurred. Borrowing costs are interest andother costs incurred by an entity in connection with the borrowingof funds.The Group capitalises borrowing costs for all qualifying assets whoseconstruction commencement date is on or after 1 January 2009. TheGroup continues to expense borrowing costs as incurred for projectswhose commencement date was before 1 January 2009.Note 1.5.10. Investment propertyInvestment property is property held to earn rentals or for capitalappreciation or both. It is recognised and measured in accordancewith IAS 40.The shopping centres owned by the Group are classified as investmentproperty.Subsequent to initial recognition, they are measured at historical costless accumulated depreciation and any accumulated impairmentlosses. Their fair value is disclosed in the notes to the consolidatedfinancial statements. Investment property is depreciated over thesame useful life and according to the same rules as owner-occupiedproperty.The shopping malls owned by Mercialys are valued on an assetby-assetbasis by independent appraisers in accordance with RICS(Royal Institute of Chartered Surveyors) standards, using the openmarket value appraisal methods recommended in the 3 rd edition of theFrench Property Appraisal Charter (Charte de l’expertise en évaluationimmobilière) of June 2006 and the 2000 report of the combinedworkgroup set up by the French securities regulator (COB nowrenamed AMF) and the French accounting board (CNC) on propertyasset valuations for listed companies. One third of Mercialys’ assetsare re-appraised each year by rotation and the existing appraisalsfor the other two thirds are updated. In accordance with the COB/CNC 2000 report, two methods were used to determine the marketvalue of each asset:■the income capitalisation (IC) method consists of assessing therental revenue generated by the property and multiplying thisincome by the market yield on comparable properties (selling space,66 Casino Group | Registration Document 2010