Under French domestic law, a company that owns shares may sell the usufruct of these shares and keep the ownership title for a determined period. According to the Committee of Accounting Study of the French National Counsel of Certified Public Accountants, since the sale of usufruct rights leads to an actual split of the ownership, such a sale has to be recorded as a fixed asset disposal. The accounting value of the disposed fixed assets (i.e. usufruct rights) must be estimated within the accounting value of the shares, according to criteria similar to the ones employed for the valuation of a fully owned share. Capital gains derived from the usufruct sale (i.e. the difference between the actual price of the sale of the usufruct rights and their accounting value), must be included in the accounting period when the sale has occurred. The company may book, if the case arises, a provision for any loss on the value of the ownership title of the shares.
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