EDF / 2018 Reference document

6.

FINANCIAL STATEMENTS Notes to the consolidated financial statements

The difference between the lease liability estimated at 31 December 2017 and 31 December 2018 results from new lease contracts, revisions and updates of existing lease contracts, partly offset by repayments of the lease liability and deconsolidation of one entity.

The differences at 31 December 2018 between operating lease commitments presented in accordance with IAS 17 and the lease liability under IFRS 16 are explained as follows:

31/12/2018

(in billions of euros)

Operating lease commitments as lessee at 31/12/2018 (note 46.1.1.3)

4.4

Unrecognised contracts (IFRS 16 exemptions)

(0.1)

Differences in the durations applied for termination and extension options that are reasonably certain to be exercised

1.1

Leases signed in 2018 for an asset available after 1 January 2019

(0.3) (0.1)

Other

Estimated non-discounted lease liability under IFRS 16 at 31/12/2018

5.0

Discount effect

(0.5)

4.5

Estimated discounted lease liability under IFRS 16 at 31/12/2018

Amendments to IFRS 9 1.2.4.2 The amendments to IFRS 9 entitled “Prepayment Features with Negative Compensation”, adopted on 22 March 2018 by the European Union, will be applicable from 1 January 2019. Based on the operations completed to date, no impact is anticipated for the Group. IFRIC 23 “Uncertainty over income tax 1.2.4.3 treatments” IFRIC 23 “Uncertainty over income tax treatments”, adopted by the European Union on 23 October 2018, will be applicable from 1 January 2019. This interpretation clarifies application of the provisions of IAS 12 “Income taxes” regarding recognition and measurement of income tax when fiscal uncertainty exists. Based on the Group’s analyses in 2018, implementation of IFRIC 23 should not have any material impacts for the Group. Amendments to IAS 28 “Long term 1.2.4.4 Interests in Associates and Joint Ventures” The amendments to IAS 28, adopted by the European Union on 8 February 2019, clarify that an entity should first apply IFRS 9 “Financial Instruments” to other interests in an associate or joint venture that form part of its net investment in that associate and joint venture but are not accounted for by the equity method. This standard is not expected to generate any significant impacts for the Group. The following IASB publications have not yet been adopted by the European Union but are expected to be applicable for financial years beginning on 1 January 2019, 1 January 2020 or 1 January 2021. Analyses are in process to estimate their potential impact on the Group’s financial statements: amendments to IAS 19 entitled “Plan Amendment, Curtailment or Settlement”. ■ IAS 19 already required actuarial assumptions to be updated and the net liability (or asset) on defined-benefit plans to be revalued. These amendments clarify that a company must update its actuarial assumptions during the accounting period to estimate the current service cost and the net interest expense on defined benefits from the date of the change affecting the plan; annual improvements to IFRS, 2015-2017 cycle, containing amendments to: ■ IFRS 3 and IFRS 11: when one partner in a joint operation acquires ■ additional interests that lead it to obtain exclusive control, its previous Standards and interpretations published 1.2.5 by the IASB but not yet adopted by the European Union

interest in the assets and liabilities of the joint operation must be restated at fair value through profit and loss, IAS 12: the tax impacts of dividend distributions must be recognised in ■ profit and loss, in other components of comprehensive income or in equity, consistent with the treatment of the operations that generated them, IAS 23: when a company has a specific borrowing for an asset under ■ construction, the interest on that borrowing is allocated to the asset concerned until it is practically ready for its intended use, at which time the interest is included in the interest on all non-specific borrowings; amendments to IFRS 3 entitled “Definition of a business”, which clarify the ■ distinction between the purchase of a business and the purchase of a group of assets; amendments to the conceptual framework, published on 29 March 2018; ■ amendments to IAS 1 and IAS 8, entitled “Definition of material”; ■ IFRS 17 “Insurance Contracts”. ■

1.3

SUMMARY OF THE

PRINCIPAL ACCOUNTING AND VALUATION METHODS

The following accounting methods have been applied consistently through all the periods presented in the consolidated financial statements.

Valuation 1.3.1 The consolidated financial statements are prepared on a historical cost basis, with the exception of assets acquired and liabilities assumed through business combinations, and of certain financial instruments, which are stated at fair value. 1.3.2 The preparation of the financial statements requires the use of judgments, best estimates and assumptions in determining the value of assets and liabilities, income and expenses recorded for the period, considering positive and negative contingencies existing at year-end. The figures in the Group’s future financial statements could differ significantly from current estimates due to changes in these assumptions or economic conditions. In a context characterised by financial market volatility, the parameters used to prepare estimates are based on macro-economic assumptions appropriate to the very long-term cycle of Group assets. Management judgements and estimates

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I Reference Document 2018