Kinepolis Annual Report 2014

1. Significant accounting policies

Kinepolis Group NV (the “Company”) is a company

established in Belgium. The consolidated financial

statements of the Company for the year ending

31 December 2014 include the Company and its

subsidiaries (together the “Group”) and the Group’s interest

in equity accounted investees. On 23 March 2015 these

consolidated financial statements were approved for

publication by the Board of Directors.

STATEMENT OF COMPLIANCE

The consolidated financial statements have been prepared

in accordance with the International Financial Reporting

Standards (IFRS), as published by the International

Accounting Standards Board (IASB) and adopted by the

European Union until 31 December 2014. The Company

has not applied any European exceptions to IFRS, which

means that the financial statements fully comply with the

IFRS standards.

BASIS OF PREPARATION

The consolidated financial statements are presented in

euro, rounded to the nearest thousand. They were drawn

up on a historical cost basis, with the exception of the

following assets and liabilities which are recorded at fair

value: derivative financial instruments, contingent

considerations and financial assets available for sale.

Assets classified as held for sale are measured, in accord-

ance with IFRS 5, at the lower of their carrying amount

and fair value less costs to sell.

The accounting policies have been applied consistently

across the Group. They are consistent with those applied

in the previous financial period.

A number of new standards and amendments to existing

standards that became applicable to the preparation of

the consolidated annual accounts as from 1 January 2014

gave no cause to change the Group’s accounting rules and

have no material impact on the consolidated financial

statements.

The preparation of the financial statements under IFRS

requires management to make judgments, estimates and

assumptions that influence the application of the policies

and the reported amounts of assets and liabilities, income

and expenses.

The estimates and related assumptions are based on

past experience and on various other factors that are

considered reasonable in the given circumstances.

The outcomes of these form the basis for the judgment as

to the carrying amount of assets and liabilities where this

is not evident from other sources. Actual results can differ

from these estimates. The estimates and underlying

assumptions are reviewed on an ongoing basis. Revisions

of estimates are recognized in the period in which the

estimates are revised if the revision affects only this

period, or in the revision period and future periods if the

revision affects both the reporting period and future

periods.

Judgements, estimates and assumptions are made,

among other things, when:

★

Determining the useful life of intangible assets and

property, plant and equipment, with the exception of

goodwill (see related accounting policies);

★

Assessing the necessity of and estimating impairment

losses on intangible assets (including goodwill) and

property, plant and equipment;

★

Determining impairments on inventories;

★

Recording and calculating provisions;

★

Assessing the degree to which losses carried forward

will be used in the future;

★

Classifying leases (see notes 11 and 25);

★

Prospectively evaluating the effectiveness of cash flow

hedges;

★

Determining the fair value of the contingent

considerations within the framework of business

combinations (see notes 10 and 24).

The estimates and assumptions with a significant proba-

bility of causing a material adjustment to the value of the

assets and liabilities during the next financial period are

stated below.

Recoverability of deferred tax assets

Deferred tax assets for unused tax losses will only be

recognized if future taxable profits will be available to

recover these losses (based on budgets and forecasts).

The actual tax result may differ from the assumption

made when the deferred tax was recorded. We refer to

Note 13 for the relevant assumptions.

05 / FINANCIAL REPORT

KINEPOLIS GROUP

ANNUAL REPORT 2014