AIRBUS - 2019 Financial Statements

2.7 Capital Structure and Financial Instruments Notes to the IFRS Consolidated Financial Statements /

37.6 Net Gains or Net Losses The Company’s net gains or net losses recognised in profit or loss in 2019 and 2018, respectively, are as follows:

2019

2018

(In € million)

Financial assets or financial liabilities at fair value through profit or loss Held for trading

(212)

(104)

Designated on initial recognition

228

(254)

(155)

(30)

Financial assets at amortised cost

26

2

Financial assets at fair value through OCI (previously available-for-sale)

5

1,360

Financial liabilities measured at amortised cost

Net gains of €403 million (2018: net gains of €329 million) are recognised directly in equity relating to financial assets at fair value. Interest income from financial assets or financial liabilities through profit or loss is included in net gains or losses.

37.7 Impairment Losses Loss allowances —For its portfolio of debt instruments including bonds, term deposits and commercial papers, the Company measures loss allowances at an amount that represents credit losses resulting from default events that are possible within the next 12 months, unless the credit risk on a financial instrument has increased significantly since initial recognition. In the event of such significant increase in credit risk the Company measures loss allowances for that financial instrument at an amount equal to its life-time excepted losses, i.e. at an amount equal to the excepted credit losses that result from all possible default events over the excepted life of that financial instrument. The Company applies the low credit risk exemption allowing the Company to assume that there is no significant increase in credit risk since initial recognition of a financial instrument,

if the instrument is determined to have low credit risk at the reporting date. Similarly, the Company has determined that its trade receivables and contract assets generally have low credit risk. The Company applies the simplified approach permitted by IFRS 9 of measuring expected credit losses of trade receivables and contract assets on a life-time basis from initial recognition. Investment grade instruments — The Company considers a significant increase in credit risk to have occurred, if there is a downgrade by four notches such that the instrument moves into a high yield bucket as a direct result of the downgrade. With respect to instruments that were high yield at initial recognition, a downgrade by four notches is considered as a significant increase in credit risk.

2

Stage 1 12-month ECL

Stage 2 Life-time ECL

Stage 3 Credit impaired ECL

Total

(In € million)

At 1 January 2019

3.49

1.13

0

4.62

Change in financial assets

0.01

(0.69)

0

(0.68)

Change in risk parameters

0.67

(0.17)

0

0.50

At 31 December 2019

4.17

0.27

0

4.44

Stage 1 12-month ECL

Stage 2 Life-time ECL

Stage 3 Credit impaired ECL

Total

(In € million)

At 1 January 2018

3.36

0

0

3.36

Change in financial assets

0.07

0.75

0

0.82

Change in risk parameters

0.06

0.38

0

0.44

At 31 December 2018

3.49

1.13

0

4.62

77

Airbus / Financial Statements 2019