Compagnies des Alpes // 2019 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

1.18 ACCOUNTS RECEIVABLE Accounts receivable are recognised at amortised cost. An impairment loss is recognised depending on the expected losses and the actual losses. Any impairment loss is recognised in pro fi t or loss. CASH AND CASH EQUIVALENTS Cash and cash equivalents include petty cash, bank balances and short- term investments in money market investments. Such investments are readily convertible into cash at their nominal value, and the risk of a change of value is insigni fi cant. Overdrafts are presented as liabilities in the balance sheet, under “current borrowings”. TREASURY STOCK Treasury stock is recorded at acquisition cost with a corresponding reduction in shareholders’ equity. Treasury stock sale proceeds are credited to shareholders’ equity and not recognised in the income statement. 1.19 1.20 The CDA Group’s commitments with respect to retirement bene fi ts derive from legal obligations and collective bargaining agreements applicable in the countries in which Group subsidiaries operate. In France, company commitments to permanent or seasonal employees are re fl ected either in premiums paid to insurance companies or in provisions. If the premium paid by a company only partly covers its commitments, a provision is funded for the remainder. The commitments are calculated for all Group employees in France, except for seasonal workers in the Leisure parks segment, where turnover is extremely high. It is thus considered unlikely that these workers will still be employed by the Group when they retire. The total of these commitments is determined on the basis of the current salaries of employees by calculating the bonuses that will be paid to employees upon retirement, having regard to their seniority at that date. Gains and losses resulting from changes in actuarial assumptions, plus the impact of regulatory changes, are recognised in shareholders’ equity. Supplementary pension bene fi ts granted to executives of certain subsidiaries are revalued each year. In other countries where the CDA Group operates (the Netherlands and Belgium in particular), retiring employees receive no retirement package from their employer. Therefore, no provision is required. However, companies contribute each year to provident funds (pension funds). The absence of the Group’s obligations with respect to these contracts is veri fi ed each year. 1.21 PROVISIONS Provisions for retirement bonuses

Other provisions Provisions are recognised when, at the end of the reporting period, the Group has an obligation to a third party arising from a past event that is certain or likely to lead to an out fl ow of resources to the third party, with no equivalent consideration received. These provisions are estimated in accordance with their nature, with the most likely assumptions taken into account. Provisions for restructuring costs are recognised once the Group has a formal, detailed restructuring plan that has been communicated to the relevant parties. BORROWINGS Borrowings are initially recognised at fair value, net of transaction costs incurred (less fees and issue or redemption premiums, these adjustments being factored into the calculation of the e f fective interest rate). Borrowings are subsequently recognised at amortised cost. Any di ff erence between the income (net of transaction costs) and the redemption value is recognised in the income statement over the duration of the loan, in accordance with the e ff ective interest rate method. 1.22 The Group’s use of derivatives such as interest rate swaps, caps or other equivalent futures contracts is designed to hedge against interest rate and foreign exchange risk. For each cash fl ow hedge, the hedged fi nancial liability is recognised in the balance sheet at amortised cost. Changes in the value of the derivative are recognised in shareholders’ equity. To the extent that fi nancial expenses and income from the hedged item a ff ect pro fi t or loss in a given reporting period, the fi nancial expenses and income from the derivative recognised in shareholders’ equity for the same reporting period are transferred to pro fi t or loss. When a derivative does not meet the criteria for hedge accounting, changes in fair value are recognised in pro fi t or loss. INCOME TAX AND DEFERRED TAXES Group income taxes are determined in accordance with tax laws in force in the country where the income is taxable. Deferred taxes A temporary di ff erence between the book value of an asset or liability and its tax base gives rise to recognition of deferred tax by means of the liability method, using the most recent income tax rates enacted (or substantively enacted). A deferred tax liability is recognised for all taxable temporary di ff erences. No deferred tax assets are recognised with respect to tax loss carryforwards unless it is likely they will be recovered within a reasonable time-frame (likelihood is calculated on the basis of available forecasts). Deferred tax assets and liabilities are o ff set for each tax entity. 1.24 1.23 DERIVATIVES AND HEDGING OPERATIONS

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Compagnie des Alpes I 2019 Universal registration document