AFD - 2019 Universal registration document

CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS 6 Notes to the consolidated financial statements

The Group has applied the modified retrospective method by recognising the cumulative effect of the initial application on the transition date (1 Ǿ January Ǿ 2019). The application of IFRS Ǿ 16 has not had a significant impact on the Group’s shareholders’ equity. Given this choice, the following simplification measures provided by the standard were applied at the transition date:

P the exclusion of leases with a residual duration less than or equal to 12 Ǿ months; P the exclusion of the component related to the initial direct costs of the asset’s measurement in respect of the right to use at the date of the first application.

The table below presents the balance sheet items impacted by the application of IFRS Ǿ 16 as at the date of the first application:

Impact 1st b application

1 January 2019

31 December 2018

In thousands of euros

Assets Property, plant and equipment

234,082 464,555 230,473 452,408 686,490

90,514 90,514

324,596 555,069 230,473 450,815 775,411

Gross value

Depreciation/amortisation and impairment

Accruals and miscellaneous assets

-1,593

TOTAL IMPACTS IFRS b 16

88,921

Liabilities Other liabilities

2,076,824 2,076,824

88,921 88,921

2,165,745 2,165,745

TOTAL IMPACTS IFRS b 16

6.2.3 Principles for the preparation of the consolidated fi nancial statements of the AFD Group at 31 b December b 2019 6.2.3.1 Consolidation scope and methods 6.2.3.1.1. Consolidation scope AFD’s consolidated financial statements cover all fully- controlled enterprises, joint ventures and companies on which the Institution exerts a significant influence. The following are not included in the consolidation scope: P companies of no real significance; P foreign companies in which AFD holds a minority interest and does not exercise significant influence due to the companies being either fully or partially state-owned. IFRS b 10-11-12 consolidation standards: Signi fi cant judgements and assumptions used in determining the scope of consolidation: The elements used to draw a conclusion on whether AFD exercises control or influence over the entities in which it invests are many. Accordingly, the Group determines its ability to exercise influence over the management of another entity by taking due consideration of the entity’s structure, shareholders, arrangements and the participation of AFD and its subsidiaries in decision-making bodies. Moreover, materiality with regard to Group accounts is also subject to analysis. The list of companies in which AFD directly or indirectly holds an equity interest that exceeds 20% of the company’s share capital is presented on the following page.

IFRIC b 23 “Uncertainty over Income Tax Treatments” This interpretation of IAS Ǿ 12 “Income Taxes” clarifies the treatment of all uncertainties over the acceptability of tax treatments related to income tax. The application of these amendments and interpretations did not have an impact on the AFD Group. Amendments to IAS 39, IFRS 9 and IFRS 7 “Changes in b criteria for hedge accounting requirements” In September 2019, the IASB introduced amendments to IAS 39, IFRS 9 and IFRS 7 for the first phase of the IBOR reform, which changes the requirements of the criteria for using hedge accounting by allowing the continuation of hedging relationships existing before the effective implementation of that reform. These amendments were adopted by the European Commission on 15 January 2020 with mandatory application for the 2020 financial statements. In January 2019, AFD started a Group-wide transition process under the direction of the Finance Department to comply with regulatory requirements and anticipate the impact of changing indexes on the economic balance of its contracts. In addition, the data were surveyed and analysed. It was found that the rates the AFD Group is largely exposed to in its hedging relationships are EONIA, EURIBOR and LIBOR. The hedging relationships in micro-hedges were tested as of 31 December 2019 based on a present-value discounted at €STR and compared to the fair values of the decree based on an EONIA present-value discount in order to simulate the earnings impact of a hypothetical switch to €STR. This work is still in the process of completion, and the quantitative impacts will be announced in the first half of 2020.

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UNIVERSAL REGISTRATION DOCUMENT 2019

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