BPCE - 2018 Registration document

5 FINANCIAL REPORT

IFRS Consolidated Financial Statements of BPCE SA group as at December 31, 2018

recorded in the income statement if the Group determines that the value of the asset will not be recovered in its entirety. For unlisted equity instruments, a qualitative analysis of their situation is carried out. Impairment losses recognized on equity instruments may not be reversed and nor may they be written back to income. Losses are recorded under “Net income from insurance businesses”. A subsequent increase in value is taken to “Gains and losses recognized directly in other comprehensive income” until disposal of the securities. Impairment losses are recognized on debt instruments such as bonds or securitized transactions (ABS, CMBS, RMBS, cash CDOs) when there is a known counterparty risk. The Group uses the same impairment indicators for debt securities as those used for individually assessing the impairment risk on loans and receivables, irrespective of the portfolio to which the debt securities are ultimately designated. For perpetual deeply subordinated notes, particular attention is also paid if, under certain conditions, the issuer may be unable to pay the coupon or extend the issue beyond the scheduled redemption date.

In the event of an improvement in the issuer’s financial position, impairment losses taken on debt instruments must be written back to the income statement. Impairment losses and write-backs are recorded in “Cost of credit risk” (for the insurer’s net share). Impairment of loans and receivables IAS 39 defines the methods for calculating and recognizing the impairment of loans. A loan or receivable is deemed to be impaired if the following two conditions are met: there is objective evidence of impairment on an individual or ● portfolio basis: there are “triggering events” or “loss events” identifying counterparty risk occurring after the initial recognition of the loans in question. On an individual level, the criteria for deciding whether or not a credit risk has been incurred include the existence of past due payments; these events are liable to lead to the recognition of incurred ● losses. Impairment is determined as the difference between the amortized cost and the recoverable amount of the receivable, i.e. the present value of estimated recoverable future cash flows taking into account the impact of any collateral.

12/31/2018

01/01/2018

in millions of euros

Investment property

1,375

1,312

Financial assets at fair value through profit or loss

22,014 49,479

22,048 46,430

Available-for-sale financial assets

Loans and receivables due from credit institutions Loans and receivables due from customers

383

518

12,759

10,312

Held-to-maturity financial assets

1,291

1,885

Share held by cedents and retrocessionaires in liabilities relating to insurance policies and financial contracts

13,050

11,394

Receivables arising from insurance and assumed reinsurance activities

2,130

1,425

Receivables arising from ceded reinsurance activities

91

30

Deferred acquisition costs

709

697

TOTAL INSURANCE BUSINESS INVESTMENTS

103,281

96,051

9.1.1.1 Investment property

12/31/2018

01/01/2018

Accumulated depreciation and impairment

Accumulated depreciation and impairment

Gross amount

Net amount Gross amount

Net amount

in millions of euros

Investment property – At historical cost Investment property – At fair value Investment property – UL policies

44

(14)

30

44

(13)

31

970 374

970 374

918 363

918 363

TOTAL

1,388

(14)

1,375

1,325

(13)

1,312

The fair value of investment property is classified in Level 3 of the fair value hierarchy in accordance with IFRS 13.

488

Registration document 2018