for the Group and hence do not require recognition of provisions. Most of the deﬁned contributions plans to which the company and its subsidiaries contribute are additional to the employees’ legal retirement plans. In the case of the latter, the company and its subsidiaries contribute directly to a social security fund. Deﬁned Beneﬁts Plans These refer to post-employment beneﬁts payable plans that guarantee contractual additional income for certain categories of employee (in some cases these plans are governed by speciﬁc industry-wide agreements). For the Group, these plans only cover lump-sum termination payments solely as required by legislation or as deﬁned by the relevant industrywide agreement. The guaranteed additional income represents a future contribution for which a liability is estimated. This liability is calculated by estimating the beneﬁts to which employees will be entitled having regard to projected end-of-career salaries. Beneﬁts are reviewed in order to determine the net present value of the liability in respect of deﬁned beneﬁts in accordance with the principles set forth in IAS 19. Actuarial assumptions notably include a rate of salary increase, a discount rate (this corresponds to the average annual yield on investment-grade bonds with maturities approximately equal to those of the Group’s obligations), an average rate of social charges and a turnover rate, in accordance with local regulations where appropriate, based on observed historical data. Actuarial gains and losses are recognised in other comprehensive income, in accordance with the principles set forth in IAS 19 (revised). The relevant portion of any change in past-service cost is recognised immediately as a loss (in the case of an increase) or as a gain (in the case of a reduction) in the income statement when a plan is amended, in accordance with the principles set forth in IAS 19 (revised).
NOTE 2.16 PROVISIONS FOR OTHER LIABILITIES AND CHARGES
obligation are probable or certain, and if they can be measured reliably. In view of the short-term nature of the risks covered by these provisions, the discounting impact is immaterial and therefore not recognized. At the time of the effective payment, the provision reversal is deducted from the corresponding expenses. Provisions for Warranties A provision for warranties covers, on the basis of historical data, probable costs arising from warranties granted by the Group to its customers at the time of the sale of CAD/CAM equipment, for replacement of parts, technicians’ travel and labor costs. This provision is recorded at the time of the booking of the sale generating a contractual obligation of warranty.
NOTE 2.17 TRADE PAYABLES
Trade accounts payables refer to obligations to pay for goods or services acquired in the ordinary course of business. They are classiﬁed in current liabilities when payment is due in less than twelve months, or in non-current liabilities when payment is due in more than one year.
NOTE 2.18 REVENUES
All known risks at the date of Board of Directors’ meeting are reviewed in detail and a provision is recognized if an obligation exists, if the costs entailed to settle this
Revenues from sales of hardware are recognized when the signiﬁcant risks and beneﬁts relating to ownership are transferred to the purchaser. For hardware, these conditions are fulﬁlled upon physical transfer of the hardware in accordance with the contractual sale terms. For software, these conditions are generally fulﬁlled at the time of installation of the software on the customer’s computer (either by CD-ROM or downloading). Revenues from software evolution and on-line services contracts and hardware maintenance and on-line services contracts are billed in advance, and their booking is spread over the duration of the contracts. Revenues from the billing of services not covered by recurring contracts are recognized at the time of performance of the service or, where appropriate, on a percentage of completion basis.