BPCE - 2019 Universal Registration Document

FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF BPCE SA GROUP AS AT DECEMBER 31, 2019

5.2

FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Accounting principles Financial assets and liabilities at fair value through profit or loss comprise instruments held for trading, including derivatives; certain assets and liabilities that the Group chose to recognize at fair value at their date of acquisition or issue using the fair value option available under IFRS 9; and non-SPPI assets. Date of recognition Securities are recorded in the balance sheet on the settlement-delivery date. Temporary transfers of securities are also recorded on the settlement-delivery date. When such transactions are recorded under “Assets and liabilities at fair value through profit or loss”, the commitment is recorded as an interest rate derivative. The first-in, first-out (FIFO) method is applied to any partial disposals of securities, except in special cases.

5.2.1

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Accounting principles Financial assets at fair value through profit or loss are:

financial assets held for trading, i.e. securities acquired or issued principally for the purpose of selling them in the near term; • financial assets that the Group has chosen to recognize at fair value through profit or loss at inception using the fair value • option available under IFRS 9. The qualifying criteria used when applying this option are described above; non-SPPI debt instruments; • equity instruments measured by default at fair value through profit or loss (which are not held for trading purposes). • These assets are measured at fair value at the date of initial recognition and at each balance sheet date. Changes in fair value over the period, interest, dividends, and gains or losses on disposals on these instruments are recognized in “Net gains or losses on financial instruments at fair value through profit or loss”, with the exception of non-SPPI debt financial assets whose interest is recorded in “Interest income”. Financial assets in the trading book mainly include proprietary securities transactions, repurchase agreements and derivative instruments contracted by the Group to manage its risk exposure. Assets designated at fair value through profit or loss IFRS 9 allows entities to designate financial assets at fair value through profit or loss on initial recognition. However, an entity’s decision to do so may not be reversed. Compliance with the criteria stipulated by the standard must be verified prior to any recognition of an instrument using the fair value option. This option may only be applied to eliminate or significantly reduce an accounting mismatch. Applying the option eliminates accounting mismatches stemming from the application of different valuation rules to instruments managed under a single strategy.

5

Financial assets in the trading book mainly include proprietary securities transactions, repurchase agreements and derivative instruments contracted by the Group to manage its risk exposure.

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UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE