liability on retained earnings of subsidiaries is recognized only if there is truly an intent to distribute those earnings and provided that the tax liability is not cancelled upon the filing of a consolidated tax return.

Use of Estimated Values
The preparation of the financial statements and the related notes requires the use of estimates and assumptions both in the measurement of certain assets and liabilities and in the valuation of contingent assets and liabilities. The actual results that arise upon the occurrence of the relevant events could differ from these estimates. Estimates are also used to measure certain sales revenues, the reserves for risks and charges, the allowances for doubtful accounts, depreciation and amortization, as well as to value derivatives, employee benefits, income taxes and impairment losses. Estimates and assumptions are revised on a regular basis, and the impact of any such revision is immediately recognized in the income statement.
Reconciliation Schedules Required by IFRS 1
Schedules showing reconciliations of the Group interest in shareholders' equity and the income statement are provided below in order to ensure maximum disclosure. Notes explaining these schedules can be found in the document entitled "Transition to the International Financial Reporting Standards (IAS/IFRSs)," which the Company published on July 28, 2005.
Reconciliation of Group Interest in Shareholders' Equity at January 1, 2004 and December 31, 2004 Showing the Impact of the Transition
to the IAS/IFRSs
The table below provides a reconciliation of Group interest in shareholders' equity and shows the main transition adjustments made to the line items in the financial statements at December 31, 2003 and December 31, 2004.
Reconciliation of Group's Interest in Shareholders' Equity at January 1, 2004
(in millions of euros) Group interest in shareholders' equity
Group interest in shareholders' equity in the financial statements at December 31, 2003 5,213
1. Proportional consolidation of Edipower   21
2. Impact of change in the scope of consolidation (excluding Edipower)   50
3. Use of fair value to measure non-current assets for transition purposes   52
4. Derecognition of intangible assets   (26)
5. Sundry adjustments and eliminations   (34)
Group interest in shareholders' equity at January 1, 2004, in accordance with the IAS/IFRSs 5,276
Reconciliation of Group's Interest in Shareholders' Equity at December 31, 2004
(in millions of euros) Group interest in shareholders' equity
Group interest in shareholders' equity in the financial statements at December 31, 2004 5,412
1. Proportional consolidation of Edipower   (2)
2. Impact of change in the scope of consolidation (excluding Edipower)   37
3. Use of fair value to measure non-current assets for transition purposes   50
4. Derecognition of the amortization of goodwill   213
5. Derecognition of intangible assets   (13)
6. Sundry adjustments and eliminations   10
Group interest in shareholders' equity at December 31, 2004, in accordance
with the IAS/IFRSs before the application of IAS 32/39 5,707
1. Use of amortized cost valuation of financial liabilities and bonds 26
2. Income (loss) from derivatives not defined as hedging pursuant IAS 39 3
3. Revaluation (write down) of cash flow hedge derivatives (13)
4. Revaluation (write down) of equity investments held for sale 22
Group interest in shareholders' equity in accordance with IAS/IFRS principles
at January 1, 2005 after the application of IAS 32/39 5,745