Euronext - 2020 Universal Registration Document

Financial Statements

Notes to the Consolidated Financial Statements

NOTE 3 The significant accounting policies applied in the preparation of these Consolidated Financial Statements are set out below. These policies have been consistently applied to all the years presented, unless stated otherwise. The Financial Statements are for the Group consisting of Euronext N.V. and its subsidiaries. A) Basis of preparation The Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union. They also comply with the financial reporting requirements included in Title 9 Book 2 of the Dutch Civil Code, as far as applicable. The Consolidated Financial Statements have been prepared on a historical cost basis, unless stated otherwise. B) Basis of consolidation These Consolidated Financial Statements include the financial results of all subsidiaries in which entities in the Group have a controlling financial interest and it also incorporates the share of results from associates and joint ventures. The list of individual legal entities which together form the Group, is provided in Note 4. All transactions and balances between subsidiaries have been eliminated on consolidation. All transactions and balances with associates and joint ventures are reflected as related party transactions and balances (see Note 36). (i) Subsidiaries Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities Covid-19 The global pandemic from the Covid-19 outbreak has caused disruption to financial markets and normal patterns of business activity across the world, including in the markets in which the Group operates. In particular, unprecedented actions to protect public health and monetary and fiscal policy measures taken by governments and central banks make the severity of the economic impact of the Covid-19 pandemic very uncertain. To protect the health and safety of employees, the Group applies the recommendations of local authorities: widespread remote working for staff (including ensuring all staff provided with required material), reinforced cleaning measures for those in Euronext offices, additional barriers, face masks and hand sanitizer for all employees, etc . Reinforced communication from management and mental health resources for employees was made available. The current health situation has had no adverse impact so far on the Group’s market operations. The Group has been able to ensure smooth and efficient running of critical functions and processes. Euronext markets remained open, servicing a highly volatile trading

of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intergroup transactions, balances and unrealised gains and losses on transactions between companies within the Group are eliminated upon consolidation unless they provide evidence of impairment. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interest in the results and equity of subsidiaries are shown separately in the consolidated statement or profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively. (ii) Associates and joint arrangements Associates are entities over which the Group has the ability to exercise significant influence, but does not control. Generally, significant influence is presumed to exist when the Group holds 20% to 50% of the voting rights in an entity. Joint arrangements are joint operations or joint-ventures over which the Group, together with another party or several other parties, has joint control. Investments in associates and joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the postacquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint environment, positively impacting the Group’s trading revenues. The effects of the Covid-19 outbreak did not lead to the Group making use of any financial support from governments in the form of reliefs or grants and did not lead to a negative impact on the Group’s liquidity position or to an impairment of goodwill. As a result, the Covid-19 pandemic has had no adverse impact on the Group’s Financial Statements for year ended 31 December 2020. The Group continues to monitor and assess the impact of Covid-19. The pandemic has impacted, and continues to impact, the global economy and, as a result, the Group’s trading revenues may suffer from loss of volume. This may also impact the Group’s other Business Lines and, notably, its listings revenues as a result of a decrease in the number of initial public offerings. In addition, the pandemic has resulted in volatility in capital markets. Such volatility is unpredictable and, while it may lead to higher trading volumes, it can result in lower predictability over the Group’s earnings. Therefore, as the ultimate severity of the Covid-19 pandemic is uncertain, the Group is not able to reasonably predict the impact it may have on its financial performance in 2021.

SIGNIFICANT ACCOUNTING POLICIES AND JUDGMENTS

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2020 UNIVERSAL REGISTRATION DOCUMENT