BPCE - 2020 Universal Registration Document

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FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF GROUPE BPCE AS AT DECEMBER 31, 2020

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing the control exercised. These potential voting rights may result, for example, from share call options traded on the market, debt or equity instruments that are convertible into ordinary shares, or equity warrants attached to other financial instruments. However, potential voting rights are not taken into account to calculate the percentage of ownership. Exclusive control is presumed to exist when the Group holds directly or indirectly either the majority of the subsidiary’s voting rights, or at least half of an entity’s voting rights and a majority within the management bodies, or is in a position to exercise significant influence. Special case: structured entities Entities described as structured entities are those organized in such a way that voting rights are not a key criterion when determiningwho has control. This is the case in particular when voting rights only apply to administrative duties and relevant activities are managed through contractual agreements. A structured entity frequently exhibits some or all of the a specific and well-defined aim, for example: implementing a (b) lease eligible for specific tax treatment, carrying out research and development, providing an entity with a source of capital or funding, or providing investors with investment options by transferring associated risk and advantages to the structured entity’s assets; insufficient equity for the structured entity to finance its (c) activities without subordinated financial support; financing through the issue, to investors, of multiple (d) instruments inter-related by contract and which create concentrations of credit risk or other risks (“tranches”). The Group therefore considers, among others, collective investment undertakings within the meaning of the French Monetary and Financial Code and equivalent bodies governed by foreign law as structured entities. Full consolidation method The full consolidationof a subsidiary in the Group’s consolidated financial statements begins at the date on which the Group takes control and ends on the day on which the Group loses control of this entity. The portion of interest which is not directly or indirectly attributable to the Group corresponds to a non-controlling interest. Income and all components of other comprehensive income (gains and losses recognized directly in other comprehensive income) are divided between the Group and non-controlling interests. The comprehensive income of subsidiaries is divided between the Group and non-controlling interests, including when this division results in the allocation of a loss to non-controlling interests. following characteristics: well-defined activities; (a)

Changes to the percentage interest in subsidiaries that do not lead to a change in control are recognized as transactions affecting equity. The effects of these transactions are recognized in equity at their after-tax amount and therefore do not impact consolidated income attributable to equity holders of the parent. Exclusion from the scope of consolidation Non-material controlled entities are excluded from the scope in accordance with the principle set out in Note 13.5. Employee pension funds and supplementary health insurance plans are excluded from the scope of consolidation insofar as IFRS 10 does not apply to either post-employmentbenefit funds or other long-term employee benefit plans, to which IAS 19, “Employee Benefits”, applies. Likewise, interests acquired with a view to their subsequent short-term disposal are recorded as available for sale and recognized in accordance with the provisions of IFRS 5 “Non-current assets held for sale and discontinued operations”. Definition An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of an entity, without exercising control or joint control over those policies. It is presumed to exist if the Group holds, directly or indirectly, 20% or more of the voting rights of an entity. A joint venture is a partnership in which the parties which exercise joint control over the entity have rights over its net assets. Joint control is the contractually agreed sharing of control over a company, which exists only when the strategic decisions require the unanimous consent of the parties sharing control. Equity method Income, assets and liabilities of investments in associates and joint ventures are accounted for in the Group’s consolidated financial statements using the equity method. An investment in an associate or a joint venture is initially recognized at its acquisition cost and subsequently adjusted for the Group share in the income and other comprehensiveincome of the associate or joint venture. The equity method is applied from the date on which the entity becomes an associate or a joint venture. On the acquisition of an associate or a joint venture, the difference between the cost of investment and the Group’s share in the net fair value of the entity’s identifiable assets and liabilities is recognized in goodwill. When the net fair value of the entity’s identifiable assets and liabilities is higher than the cost of investment, the difference is recognized in income. The share of net income of entities accounted for under the equity method is included in the Group’s consolidated income. When a Group entity carries out a transactionwith a Group joint venture or associate, the profit or loss resulting from this transaction is recognized in interests held by third parties in the associate or joint venture. INVESTMENTS IN ASSOCIATES AND JOINT 3.2.2 VENTURES

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

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