ORANGE | CIK:0001038143 | 3

  • Filed: 4/24/2018
  • Entity registrant name: ORANGE (CIK: 0001038143)
  • Generator: Merrill
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1038143/000110465918025968/0001104659-18-025968-index.htm
  • XBRL Instance: http://www.sec.gov/Archives/edgar/data/1038143/000110465918025968/oran-20171231.xml
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  • ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory

    Takeovers (business combinations)

    Business combinations are accounted for using the acquisition method:

        the acquisition cost is measured at the fair value of the consideration transferred, including all contingent consideration, at the acquisition date. Subsequent changes in the fair value of contingent consideration are accounted for either through profit or loss or through other comprehensive income, in accordance with the applicable standards;

        goodwill is the difference between the consideration transferred and the fair value of the identifiable assets and liabilities assumed at the acquisition date, and is recognized as an asset in the statement of financial position. Considering the Group’s activity, the fair values of the identifiable assets relate mainly to licenses, to customer bases and to brands (which cannot be recognized as assets when internally developed), generating induced deferred taxes. The fair value of these assets, which cannot be observed, is established using commonly adopted methods, such as those based on revenues or costs (e.g.: the "Greenfield" method for the valuation of licenses, the "relief from royalty" method for the valuation of brands and the "excess earnings" method for customer bases).

    For each business combination with an ownership interest below 100%, non-controlling interest is measured:

        either at its fair value: in which case, goodwill is recognized for the portion relating to non-controlling interests;

        or proportionate to its share of the acquiree's identifiable net assets: in which case, goodwill is only recognized for the share acquired.

    Acquisition-related costs are directly recognized in operating income in the period in which they are incurred.

    When a business combination is achieved in stages, the previously held equity interest is re-measured at fair value at the acquisition date through operating income. The related other comprehensive income, if any, is fully reclassified to profit or loss.