Euronext // 2021 Universal Registration Document

Financial Statements

Notes to the Consolidated Financial Statements

A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: n there is “an economic relationship” between the hedged item and the hedging instrument; n the effect of credit risk does not “dominate the value changes” that result from that economic relationship; n the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. The hedges relevant to the Group, that meet all the qualifying criteria for hedge accounting are accounted for, as described below: Fair value hedges The change in the fair value of a hedging instrument is recognised in the statement of profit or loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit or loss. For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the Effective Interest Rate (“EIR”) method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liabilitywith a corresponding gain or loss recognised in profit or loss. Hedges of a net investment Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment, are accounted for as follows: Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised as Other Comprehensive Income while any gains or losses relating to the ineffective portion are recognised in the statement of profit or loss. On disposal of the foreign operation, the cumulative value of any such gains or losses recorded in equity is transferred to the statement of profit or loss. The Group used a foreign exchange forward contract as a hedge of its exposure to foreign exchange risk on its investments in foreign subsidiaries. Refer to Note 23 for more details. K) Financial instruments (i) Classification and initial recognition The Group classifies its financial instruments in the following measurement categories: n amortised cost; n fair value through Other Comprehensive Income (“FVOCI”); n fair value through profit or loss (“FVPL”).

The classification depends on the Group’s business model for managing the financial instruments and the contractual terms of the cash flows. For instruments measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income (“FVOCI”). Financial assets and financial liabilities are initially recognised on their settlement date. Except for trade receivables, at initial recognition the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“FVPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Trade receivables are initially measured at their transaction price if they do not contain a significant financing component in accordance with IFRS 15. (ii) Subsequent measurement Financial assets at amortised cost Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is measured using the effective interest rate method and is shown in finance income. Any gain or loss arising on de-recognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss. The Group’s financial assets at amortised cost includes the Group’s trade and other receivables, loans and deposits included under (non- current) Financial assets at amortised cost, short-termdeposits with a maturity of more than three months included under other current financial assets and cash and cash equivalents. Financial assets at amortised cost – CCP clearing business For financial assets from CCP clearing business all measurement effects are shown in net treasury income through CCP business. This category includes clearing member trading balances relating to certain collateralised transactions, other receivables from clearing members of the CCP business and clearing member cash an cash equivalents, representing amounts received from the clearing members to cover initial and variation margins and default fund contributions that are not invested in bonds. Debt instruments that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through Other Comprehensive Income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. Financial assets at fair value through Other Comprehensive Income (“FVOCI”)

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2021 UNIVERSAL REGISTRATION DOCUMENT