GECINA - REFERENCE DOCUMENT 2017

04

ANNUAL FINANCIAL STATEMENTS Notes to the annual financial statements at December 31, 2017

Bonds 4.3.3.6 Bonds issued by the company are recorded at their redemption value. The redemption premium is recorded on the asset side of the balance sheet and amortized under the straight-line method over the term of the bonds. 4.3.3.7 The company uses interest rate swaps, caps, swaptions and floors to hedge lines of credit and borrowings. It applied ANC regulation 2015-05 for the first time at the close of the 2017 financial year. The corresponding interest expenses and income are posted on an accruals basis to the income statement. Premiums on derivatives are amortized over the term of the instruments, with the exception of swaptions, for which the premiums are amortized on a straight-line basis over the term of the option. The recognition of the financial instruments is a reflection of management and a function of the intent of the transactions are carried out. In the case of hedging transactions, the unrealized and realized income from the hedging instruments is recorded in income over the residual life of the hedged item, symmetrically with the recognition method used for the item’s income and expenses. Changes in the value of the instruments are not recognized on the balance sheet unless they enable symmetrical handling of the hedged item. In the case of isolated open positions, changes in value are recognized in the balance sheet and unrealized losses are consistently entered as a provision for contingencies. Hedging instruments

Employee benefit commitments

4.3.3.8

Retirement benefit commitments Retirement benefit commitments resulting from the application of national and company-level collective agreements are valued by independent experts under the actuarial method and taking account of mortality tables. They are covered by an insurance policy or are accrued for any portion not covered by the insurance fund in case the funds paid are insufficient. Supplementary retirement commitments to certain employees Supplementary retirement commitments to certain employees are valued under actuarial methods factoring in mortality tables. They are managed by external organizations and payments are made to these organizations. Additional provisions are constituted in the event that the insurance fund is underfunded for the liabilities. The valuation of these retirement commitments assumes the employee’s voluntary departure. Long-service awards Commitments for long-service awards (anniversary premiums paid to personnel) are accrued on the basis of an independent estimate made at each year end.

114 GECINA - REFERENCE DOCUMENT 2017

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