IFRS

Principles of Consolidation
A list of Vivendi’s major subsidiaries, joint ventures and other associated entities is set forth in Note 28.
Full consolidation
All companies in which Vivendi has a controlling interest, specifically those in which it has the power to govern the
financial and operational policies to obtain benefits from their operations, are fully consolidated. A controlling position is
deemed to exist when Vivendi holds, directly or indirectly, a voting interest exceeding 50% and no other shareholder or
group of shareholders may exercise substantive participation rights that would enable it to veto or block ordinary decisions
taken by Vivendi.
A controlling position also exists when Vivendi, holding an interest of 50% or less in an entity, has
(i) control over more than 50% of the voting rights of such entity by virtue of an agreement with other investors; (ii) the
power to govern the financial and operational policies of the entity by virtue of a statute or contract,
(iii) the right to appoint or remove from office the majority of the members of the board of directors or other governing body
or
(iv) the power to assemble the majority of voting rights at meetings of the board of directors or other governing body.
Vivendi consolidates special purpose entities that it controls in substance because it has the right to obtain a majority of
benefits, or because it retains the majority of residual risks inherent in the special purpose entity or its assets.
Proportionate consolidation
Companies that are controlled jointly by Vivendi or another member of the group and a limited number of other shareholders
under the terms of a contractual arrangement are proportionally consolidated.
Equity accounting
Entities over which Vivendi exercises significant influence are accounted for under the equity method. Significant influence
is presumed to exist when Vivendi holds, directly or indirectly, at least 20% of an entity’s voting rights unless it can be
clearly demonstrated that Vivendi does not exercise significant influence. Significant influence can be demonstrated on the
basis of other criteria, such as representation on the board of directors or the entity’s equivalent governing body,
participation in policy-making processes, material transactions with the entity or interchange of managerial personnel.
Goodwill and Business Combinations

In accordance with the provisions of IFRS 1, Vivendi elected not to restate business combinations that occurred prior to
January 1, 2004.
In accordance with the provisions of IFRS 3, business combinations are recorded using the purchase method. Under this
method, upon the initial consolidation of an entity over which the group has acquired exclusive control, the assets acquired
and the liabilities and contingent liabilities assumed are recognized at their fair value at the date of the acquisition. At this
date, goodwill is initially measured at cost, being the excess of the cost of the business combination over Vivendi’s interest
in the net fair value of the identifiable assets, liabilities and contingent liabilities. If goodwill is negative, it is recognized in
the Statement of Earnings directly.
Subsequently, goodwill is measured at cost less recorded accumulated impairment losses. In addition, the following
principles are applied to business combinations:
 if possible on the acquisition date, goodwill is allocated to each cash-generating unit likely to benefit from the
business combination;
 in the event of acquisition of an additional interest in a subsidiary, the excess of the acquisition cost over the
carrying value of minority interests acquired is recognized as goodwill; and
 goodwill is not amortized.
Financial Assets
Financial assets consist of financial assets measured at fair value and financial assets recognized at amortized cost. Financial
assets are initially recognized at the fair value of the consideration given, for which the best evidence is the acquisition cost
(including associated acquisition costs, if any).
Financial assets at fair value

Financial assets at fair value include available-for-sale securities, derivative financial instruments with a positive value and
other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in
organized public markets, their fair value being determined by reference to the published market price at period end. For
financial assets for which there exists no published market price in an active market, fair value is then estimated. As a last
resort, the group values financial assets at historical cost, less any impairment losses, when a reliable estimate of fair value
cannot be made using valuation techniques in the absence of an active market.
Available-for-sale securities consist of unconsolidated interests and other securities not qualifying for classification in the
other financial asset categories described below. Unrealized gains and losses on available-for-sale securities are recognized
in equity until the financial asset is sold, collected or removed from the Statement of Financial Position in another way, or
until there is objective evidence that the investment is impaired, at which time the accumulated gain or loss previously
reported in equity is expensed in other financial charges and income.
Other financial assets measured at fair value through profit or loss mainly consist of assets held for trading which
Vivendi intends to sell in the near future (primarily marketable securities). Unrealized gains and losses on these assets are
recognized in other financial charges and income.
Financial assets at amortized cost

Financial assets at amortized cost consist of loans and receivables (primarily loans to affiliates and associates, current
account advances to equity affiliates and unconsolidated interests, cash deposits, securitized loans and receivables and other
loans and receivables, and debtors) and held-to-maturity investments (financial assets with fixed or determinable payments
and fixed maturity). At the end of each period, these assets are measured at amortized cost using the effective interest
method. If there is objective evidence that an impairment loss has been incurred, the amount of this loss, measured as the
difference between the financial asset’s carrying value and its recoverable amount (equal to the present value of estimated
future cash flows discounted at the financial asset’s original effective interest rate) is recognized in profit or loss. Impairment
losses may be reversed if the recoverable amount of the asset subsequently increases.

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Principles of Consolidation

Goodwill and Business Combinations

Financial assets at fair value

Financial assets at amortized cost

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