Carrefour - 2017 Registration Document

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 Notes to the Consolidated Financial Statements 2017 REGISTRATION DOCUMENT | CARREFOUR 5. 236 Non-recurring income and expenses 5.3 Accounting principles In accordance with the recommendation of the French accounting authorities (Autorité des normes comptables [ANC] recommendation no. 2013-03 dated November 7, 2013), non-recurring income and expenses are reported on a separate line of the income statement. Non-recurring items are defined as “items that are limited in number, clearly identifiable and non-recurring that have a material impact on consolidated results”. such as non-recurring impairment charges, restructuring costs and provision charges and income recorded to reflect revised estimates of risks provided for in prior periods, based on information that came to the Group’s attention during the reporting year. This classification is applied to certain material items of income and expense that are unusual in terms of their nature and frequency, They are presented separately in the income statement to “help users of the financial statements to better understand the Group’s underlying operating performance and provide them with useful information to assess the earnings outlook”. (in millions of euros) 2017 2016 Net gains on sales of assets 22 39 Restructuring costs (279) (154) Other non-recurring income and expenses (13) (127) Non-recurring income and expenses, net before asset impairments and write-offs (271) (242) Asset impairments and write-offs (1,039) (130) of which Impairments and write-offs of goodwill (707) (5) of which Impairments and write-offs of property and equipment and intangible assets (332) (125) NON-RECURRING INCOME AND EXPENSES, NET (1,310) (372) of which: Non-recurring income 397 118 Non-recurring expense (1,706) (490) Net gains on sales of assets As in 2016, gains on disposals of assets in 2017 primarily related to sales of various individually non-material assets. Restructuring costs Restructuring costs recognised in 2017 concerned plans to streamline operating structures in several of the Group’s countries. Restructuring measures primarily concern France (particularly costs relating to the overhaul of supply chains), Italy, Argentina, China (store closure plan), and Spain (plan to integrate the hypermarkets acquired from Eroski). The expense recognised in 2016 mainly includes the residual impact of integrating the Dia France stores acquired in late 2014, as well as costs relating to the overhaul of supply chains in France. Impairment losses and asset write-offs goodwill allocated to its Italian operations. This impairment loss has no impact on cash flow. In defining its transformation plan, the Group reviewed its financial trajectories and adjusted certain assumptions underlying financial projections for its operations in Italy. The impairment tests carried out on this basis (see the accounting principles in Note 6.3) led the Group to recognise a 700 million-euro impairment loss against Impairment was also recognised against non-current assets other than goodwill in an amount of 302 million euros, primarily in France, China and Italy. This impairment reflects a decline in the outlook for an improvement in the profitability of certain loss-making stores, including stores which the Group intends to sell or close in 2018 within the scope of the transformation plan announced on January 23, 2018 (particularly former Dia stores in France). In addition, 30 million euros’ worth of assets were written off during the year (2016: 33 million euros). In 2016, impairment losses against non-current assets other than goodwill totalled 93 million euros and chiefly concerned assets of loss-making stores, mainly in China. Other non-recurring income and expenses Other non-recurring income and expenses recognised in 2016 consisted mainly of the impact of a change in accounting treatment of the tax on retail space in France (TaSCom) under IFRIC 21 – Levies. The TaSCom law dated July 13, 1972 was modified by France’s Amended Finance law for 2015 and by the 2017 Finance law.