BPCE - 2020 Universal Registration Document

5

FINANCIAL REPORT

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

12/31/2019

Fair value

Level 1

Level 2

Level 3

in millions of euros

FINANCIAL ASSETS AT AMORTIZED COST Loans and receivables due from banks Loans and receivables due from customers

90,504 708,873 28,246 77,900 560,680 239,983 18,597

139 298

30,930 131,618

59,434 576,958

Debt securities

15,246

9,331

3,670

FINANCIAL LIABILITIES AT AMORTIZED COST Amounts due to banks

64,072 309,543 161,305

13,828 251,137

Amounts due to customers

Debt securities

71,800 10,765

6,877

Subordinated debt

7,131

701

Note 11

Income taxes

11.1

INCOME TAX

Accounting principles Income tax includesall domesticand foreign taxes payableon the basis of taxable profits. Income tax also includes taxes, such as withholdingtaxes, which are payable by a subsidiary, an associate or a joint arrangement on distributions of dividends to the entity that draws up financial statements.The CVAE (Business Added Value Tax) is not considered an income tax. Income tax includes: current taxes, which are the amount of income taxes • payable on taxable profit or recoverableon a tax loss over a given period. They are calculated on the taxable income for the period for each fiscal entity in the tax consolidation scope by applying the applicable tax rates and rules set by the tax authorities and on the basis of which tax shall be paid (received); deferred tax assets and liabilities (see 11.2). • Where it is probable that one of the Group’s tax positionswill not be accepted by the tax authorities, this situation is reflected in the financial statementswhen calculating current tax (due or recoverable) and deferred tax (asset or liability). IAS 12 “Income taxes” gave no particular details on how to account for uncertaintiesin income taxes, and was clarifiedby IFRIC 23 “Uncertainty over Income Tax Treatments”, which was adopted by the European Commission on October 23, 2018 with effect from January 1, 2019. The Interpretationclarifies how to apply the deferred income tax recognitionand measurementrequirementswhen there is uncertaintyover income tax treatments.If there is doubt as to the acceptability of the income tax treatment by the tax authorityunder tax law, then this tax treatmentis an uncertain

tax treatment. Assuming it is likely that the tax authority will not accept the income tax treatment used, IFRIC 23 states that the amount of the uncertainty to be reflected in the financial statementsshall be estimatedusing the method that will better predict the resolution of the uncertainty. To determine this amount, two approaches may be used: the most likely amount or the expectedvalue of the tax treatment (that is, the weighted average of the different scenarios possible). Furthermore,IFRIC 23requiresthe measurementof tax uncertaintiesto be reassessed if facts and circumstances change or new information arises. The Group reflectsuncertaintiesregardingits tax treatmentfor income tax in its financial statements when it deems it probable that the tax authoritywill not accept its treatment.To ascertain whether a tax position is uncertainand to assess its effect on the amount of tax, the Group assumes that the tax authority will examine all amounts reported and have full knowledge of all related information.It bases its judgment on administrative policy, case-law and on the existence of any correctionsmade by the administrationrelating to similar tax uncertainties.The Group revises the estimateof the amount it expects to pay or recover from the tax authority due to tax uncertainties in the event of changes in the associated facts and circumstances, as these changes may result from (including, but not limited to) changes in tax law, the expiry of a statutory limitation period, or the outcome of audits and measures conducted by the tax authorities. Tax uncertainties are reported as assets or liabilities and according to whether they relate to a current or deferred tax under the balance sheet headings “Deferred tax assets”, “Current tax assets”, “Deferred tax liabilities” and “Current tax liabilities”.

Fiscal year 2020

Fiscal year 2019

in millions of euros

Current income tax expense

(1,287)

(1,727)

Deferred tax assets and liabilities

242

(75)

INCOME TAX

(1,045)

(1,801)

346

UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

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