BPCE - 2019 Universal Registration Document

5

FINANCIAL REPORT

BPCE PARENT COMPANY ANNUAL FINANCIAL STATEMENTS

4.8

ACCRUAL ACCOUNTS

12/31/2019

12/31/2018

Assets

Liabilities

Assets

Liabilities

in millions of euros

Foreign exchange commitments

468 309 259

0

276

0

Deferred gains and losses on hedging forward financial instruments

230

10

633

Issue premiums and expenses

15 21

256

17 42

Prepaid expenses and unearned income

19

20

Accrued income/expenses* Items in process of collection

1,118

406

1,278

396

0

13

201

0

Other

62

168 853

91

15

TOTAL

2,235

2,132

1,103

Including €1,076 million in accrued interest receivable on interest rate swaps and €284 million in accrued interest payable on interest rate swaps. *

4.9

PROVISIONS

Accounting principles This item includes provisions set up to cover contingencies and losses that are clearly identifiable but of uncertain timing or amount, that are either directly related or unrelated to banking transactions as defined under Article L. 311-1 of the French Monetary and Financial Code or related transactions defined under Article L. 311-2 of the same Code. Unless covered by a specific text, such provisions may only be recognized if the company has an obligation to a third party at the end of the fiscal year and no equivalent consideration is expected in return, in accordance with ANC Regulation No. 2014-03. In particular, this item includes a provision for employee benefits and a provision for counterparty risk on guarantee and loan commitments given. Employee benefits Short-term employee benefits mainly include wages, paid annual leave, incentive schemes, profit-sharing, and bonuses payable within 12 months of the end of the period in which the employee renders the service. They are recognized as an expense for the period, including amounts remaining due at the balance sheet date. Long-term employee benefits Long-term employee benefits are generally linked to seniority accruing to current employees and payable 12 months or more after the end of the period in which the employee renders the related service. These consist mainly of long-service awards. A provision is set aside for the amount of these obligations at the balance sheet date. The obligations are valued using an actuarial method that takes account of demographic and financial assumptions such as age, length of service, the likelihood of the employee being employed by the Group at retirement and the discount rate. The valuation also allocates costs over the working life of each employee (projected unit credit method).

Termination benefits Termination benefits are granted to employees on termination of their employment contract before the normal retirement date, either as a result of a decision by the Group to terminate a contract or a decision by an employee to accept voluntary redundancy. A provision is set aside for termination benefits. Termination benefits payable more than 12 months after the balance sheet date are discounted to present value. Post-employment benefits Post-employment benefits include lump-sum retirement bonuses, pensions and other post-employment benefits. These benefits can be broken down into two categories: defined-contribution plans, which do not give rise to an obligation for the Group, and defined-benefit plans, which give rise to an obligation for the Group and are therefore measured and recognized by means of a provision. The Group records a provision in liabilities for employee benefit obligations that are not funded by contributions charged to income and paid out to pension funds or insurance companies. Post-employment benefits are measured in the same way as long-term employee benefits. The measurement of these obligations takes into consideration the value of plan assets as well as unrecognized actuarial gains and losses. Actuarial gains and losses on post-employment benefits, arising from changes in actuarial assumptions (early retirement, discount rate, etc.) or experience adjustments (return on plan assets, etc.), are amortized under the corridor method, i.e. for the portion exceeding a variation of +/-10% of the defined-benefit obligation or the fair value of plan assets. The annual expense recognized in respect of defined-benefit plans includes the current service cost, net interest cost (the effect of discounting the obligation) less hedging assets, and the amortization of any unrecognized items that are actuarial gains or losses.

532

UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE

www.groupebpce.com