Vetoquinol Universal Registration Document 2019

Vetoquinol  Universal Registration Document 2019  Financial report   65 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 6 These policies are identical to those used by the Group as of December 31, 2018, with the exception of stan- dards, interpretations and amendments adopted by the European Union and applicable for accounting periods beginning on or after January 1, 2019: • Amendments to IAS 19 - Plan amendment, curtailment or settlement. • Amendments to IAS 28 - Long-term interests in asso- ciates and joint ventures. • Amendments to IFRS 9 - Prepayment features with negative compensation. • IFRS 16 - Leases. • Annual improvements to IFRS (2015-2017). • IFRIC 23 - Uncertainty over income tax treatments. With effect from January 1, 2019, the Group has applied IFRS 16 “Leases” (Note 6.5.15) in accordance with the “modified retrospective” approach, which provides for recognition of a liability at the transition date equal solely to the present value of residual rents, offset by a right-of-use asset adjusted for the amount of rent paid in advance or the amount of accrued lease payments; all impacts of the transition have been recorded against equity. The Group now recognizes lease liabilities that were previously classified as operating lease commit- ments in accordance with IAS 17. To allow comparison, the Group has measured and presented the impact of the standard on the various financial statements in the form of pro forma financial statements. The Group has applied the IFRIC 23 interpretation on uncertain tax positions with effect from January 1, 2019. This has had no impact on the Group financial state- ments. The other standards, interpretations and amendments applied did not have a material impact on the Group consolidated financial statements. The Group has elected not to apply in advance standards, interpretations and amendments adopted by the Euro- pean Union and applicable from January 1, 2020 and for subsequent accounting periods, namely: • Amendments to references to the conceptual framework in IFRS standards; • Amendments to IAS 1 and IAS 8 - Definition of material; • Amendments to IFRS 3 - Definition of a business; • Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest rate benchmark reform. The Group has not yet begun to analyze the potential impact of first-time application of these new standards. 6.5.3.2 Consolidation and business combinations 6.5.3.2.1 Consolidation scope The subsidiaries comprise all entities over which the Group exercises control. The Group exercises control where it: • has power over the entity; • is exposed, or has the right, to variable returns as a result of its association with the entity; • has the capacity to exercise its power in such a way as to influence the amount of the returns it receives. The subsidiaries over which the Group directly or indi- rectly exercises exclusive control, de jure or de facto, are fully consolidated. Such control is deemed to exist when the Group holds more than half of the voting rights, either directly or indirectly via its subsidiaries. Non-controlling interests are calculated as the percentage of the equity interest not held by the parent company. Joint ventures and companies over which the Group exercises considerable influence are recognized using the equity method. The results of these entities are pre- sented separately in our consolidated income statement, on a specific line, before net income. A company is included in the consolidation scope from the date on which the Group acquires control thereof, and is deconsolidated as of the date on which the Group ceases to exercise control over it. Acquisitions of subsidiaries (representing businesses as defined by IFRS 3) are recognized using the acquisition method. The cost of an acquisition is equal to the total fair value of the assets obtained, liabilities incurred or assumed and equity instruments issued by the buyer as of the acquisition date. The identifiable assets acquired and the identifiable and contingent liabilities assumed in a business combination are initially measured at fair value as of the acquisition date, irrespective of the amount of minority interests. The excess of the acqui- sition cost over the Group’s interest in the fair value of the recorded assets, liabilities and contingent liabilities is recognized as goodwill (Note 6.5.19). Conversely, if the share of assets, liabilities and contingent liabilities at fair value exceeds the acquisition cost, the excess is posted immediately to income. Non-controlling interests are shown on the balance sheet within a specific category of shareholders’ equity. The amount of their share in consolidated net income and items of other comprehensive income is presented separately below these two items. All inter-company balances and transactions, including gains and losses, as well as dividends, are eliminated on consolidation.