Euronext - 2020 Universal Registration Document

GLOSSARY, CONCORDANCE TABLES & ANNEX G

Intangible Assets Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, then the difference is recognised in profit or loss as a gain on purchase. Impairment is determined for goodwill by assessing the recoverable amount of each CGU. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. On the acquisition of a business, fair values are attributed to the assets and liabilities acquired. These may include brand names, customer and supplier relationships, software licences and intellectual property, all of which are recognised as intangible assets and recorded at cost less accumulated amortisation and accumulated impairment losses. These assets are amortised on a straight-line basis. The useful economic lives are based on management’s best estimates such as attrition rates on customer relationships, product upgrade cycles for software and technology assets, market participant perspective for brands and pace of change of regulation for business. Third-party software costs for the development and implementation of systems which enhance the services provided by the Group are capitalised and amortised over their estimated useful economic lives of 3 years-5 years. Internal product development expenditure is capitalised if the costs can be reliably measured, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group has sufficient resources to complete the development and to use or sell the asset. The assets are recorded at cost including labour, directly attributable costs and any third-party expenses, and amortised over their useful economic lives of 3 years-5 years. Intangible assets are assessed for any indicators of impairment at least at each balance sheet date. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. The recoverable amount is determined for an individual asset or CGU. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The Group recognises an intangible right-of-use asset where the Group has control of an asset for a period of more than 12 months. Assets are recorded initially at cost and depreciated on a straight- line basis over the lease term. Cost is defined as the lease liabilities recognised plus any initial costs.

Costs incurred for ordinary and/or regular maintenance and reparations are directly attributed to the income statement of the period in which they are incurred. The capitalisation of costs inherent to the expansion, modernisation or improvement of proprietary or third-party structural elements is carried out exclusively within the limits in which these respond to the requisites to be classified separately as assets. The aforementioned fixed assets are systematically depreciated in each period based on their remaining useful life, determined in relation to the remaining possibility of asset utilisation. When the activity object of amortization is composed by separate elements, whose useful life meaningfully differs from that of other parts that compose the asset, the amortization is applied for every part separately in application of the “component approach”. The useful life estimated for the various categories of tangible assets is the following:

Equipment, plant, machinery Hardware and computer system

Useful life

3 years-8 years

Plant and Equipment

3 years-8 years

Furniture and Fittings

3 years-8 years

Other assets: Improvements to leased property

The minor between duration of lease and useful life of the assets

Depreciation begins the first day of the month after the asset is available for use. The Group verifies, at least once a year, if there is any indication that an asset may be impaired. If any indication exists, the Group estimates the asset’s recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. Right-of-Use Assets and Lease Liabilities The Group recognises a right-of-use asset where the Group has control of an asset for a period of more than 12 months. Assets are recorded initially at cost and depreciated on a straight-line basis over the shorter of the lease term or the estimated useful economic life. Cost is defined as the lease liabilities recognised plus any initial costs and dilapidations provisions less any lease incentives received. The lease term is the non-cancellable term plus any optional extensions or less any reductions due to break clauses that in the judgement of management are likely to be exercised. Lease liabilities are recognised at the net present value of the future payments to be made over the lease term at the commencement of a lease. Where a lease includes a break clause or extension option, management use their best estimate on the likely outcome on a lease by lease basis. Since the Group has no external sources of financing, the net present value is determined applying a discount rate equal to the interest rate for intercompany loans to determine the net present value Lease payments due within the next 12 months are classified as current liabilities; payments due after 12 months are classified as non-current payables.

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2020 UNIVERSAL REGISTRATION DOCUMENT