Orano - Annual Activity Report 2024 326 6 STATEMENTS Consolidated financial statements - financial year ended December 31, 2024 ● for treatment-recycling, transportation and storage services: by the percentage-of-completion method; when the contract requires the customer to participate in the financing of the construction of an asset necessary for the performance of the services covered by the contract, the revenue relating to the financing received is recognized on the basis of the percentage of completion of the underlying services over the useful life of the asset, except if the customer takes control of the asset upon completion (in which case the revenue is recognized as the asset is constructed); and ● for design and equipment manufacturing contracts that meet the customer’s technical specifications: by the percentageof-completion method, except if the group does not have a sufficient right to payments for the services performed to date in the event of interruption of the contract for a reason other than the group’s default. When revenue recognition is made using the percentage-ofcompletion method in the cases described above, the percentage of completion is determined by the ratio of costs incurred to costs at termination. Revenue is recognized insofar as it is highly likely that it will not be subject to any subsequent reversal. Contract assets and liabilities Contract assets are the rights held by the group in respect of work performed, but which does not yet constitute an unconditional right to payment. Contract liabilities are the amounts recognized in the event of payments received in excess of the amount recognized as income in satisfaction of a performance obligation. They include: ● amounts received from customers and used to finance capital expenditure for the performance of long-term contracts to which they are party; and ● other advances and down payments received from customers reversed as and when the services covered by the contract are realized. In accordance with the provisions of the standard, the group offsets each contract between assets and liabilities. Trade receivables represent the unconditional right of the group to receive a payment depending solely on the passage of time. Costs of obtaining contracts Costs incurred to obtain a contract are only capitalized if: ● they are marginal costs that the group would not have incurred if it had not obtained the contract, and ● the group expects to recover them. 1.3.7. Valuation of property, plant and equipment and intangible assets 1.3.7.1. Intangible assets An intangible asset is recognized when it is probable that future economic benefits therefrom will accrue to the Company and if the cost of this asset can be reliably estimated based on reasonable and documented assumptions. Intangible assets are recorded at their acquisition or production cost. Goodwill The group applies the amendment to IFRS 3, which entered into force on January 1, 2020, to determine whether an acquisition should be accounted for as a business combination or as an acquisition of isolated asset(s). In accordance with IFRS 3 “Business combinations”, goodwill relating to a business combination represents the difference between: ● on the one hand, the sum of the following items: ● the purchase price for the takeover at fair value at the acquisition date, ● the amount of non-controlling interests in the acquired entity, and ● for step acquisitions, the fair value, at the acquisition date, of the group’s interest in the acquired entity before the acquisition of control; ● on the other hand, the net amount of assets acquired and liabilities assumed, measured at their fair value at the acquisition date. When the resulting difference is negative, it is immediately recognized in profit or loss. The amount of goodwill is definitively set within 12 months of the date of acquisition. Goodwill is allocated to the cash-generating units (CGUs) or group of CGUs in which it is monitored. Goodwill from the acquisition of subsidiaries is presented separately in the statement of financial position. Goodwill is not amortized but is subject to impairment testing whenever indications of loss of value are identified, and at least once a year, as described in 1.3.7.5. After initial recognition, goodwill is recorded at cost less, where applicable, any impairment recognized. In the income statement, impairment losses related to goodwill are presented under “Other operating expenses.” Goodwill arising on the acquisition of associates and joint ventures is included in the carrying amount of the interest recorded in the group’s statement of financial position. In the income statement, impairment losses related to this goodwill are recorded under “Share of net income of associates and joint ventures.” When a CGU or part of a CGU is sold, the share of goodwill corresponding to the transferred entity is taken into account in the carrying amount of its net assets used to determine the gain or loss realized. The share of goodwill is measured based on the relative value of the scope transferred within the CGU or group of CGUs. Research and Development expenses Research expenses incurred by the group on its own account are expensed as incurred. Research and development expenses funded by customers under contracts are included in the production cost of these contracts and recorded under “Cost of sales.”
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