CFE - 2006 annual report - Vinci

1 1 8
F. Goodwill
1. Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the company’s share of the net identifiable
assets of the acquired subsidiary, jointly controlled entity or associate at the date of acquisition.
Goodwill is not amortized but will be subject to an impairment test on an annual basis. Goodwill is expressed in the currency
of the subsidiary to which it relates. Goodwill is stated at cost less accumulated amortization and impairment losses. In res-
pect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate.
2. Negative goodwill
Negative goodwill represents the excess of the fair value of the company’s share of the net identifiable assets acquired over
the cost of acquisition.
Negative goodwill is recognized immediately in the income statement.
G. Property, plant and equipment
1. Measurement & recognition
All property, plant and equipment are recorded in assets only when it is probable that future economic benefits will impact
the entity and if the cost can be evaluated in a reliable way. These criteria are applicable at the time of initial accounting and
for later expenditure.
All property, plant and equipment are recorded at historical cost less accumulated depreciation and impairment losses.
Historical cost includes the original purchase price and other direct acquisition costs (e.g. non refundable tax, transport).
The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate proportion of production
overheads.
2. Subsequent expenditures
Subsequent expenditures are capitalized only when it increases the future economic benefits embodied in the item of pro-
perty, plant and equipment. Repairs and maintenance, which do not increase the future economic benefits of the asset to
which they relate, are expensed as incurred.
3. Depreciations
Depreciations are calculated from the date the asset is available for use, using the straight-line method over the estimated
useful lives of the assets:
Trucks: 3 years
Vehicles: 3 to 5 years
Other material: 5 years
Computer installation: 3 years
Office machines: 5 years
Office equipment: 10 years
Constructions: 25 to 33 years