GECINA - REFERENCE DOCUMENT 2017

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Cash and cash equivalents 3.5.3.5 Cash and money-market UCITS are recorded on the balance sheet at fair value. 3.5.3.6 Treasury shares held by the Group are deducted from consolidated shareholders’ equity at cost. 3.5.3.7 Gecina has instituted an equity-based remuneration plan (stock options and performance shares). The impact of services rendered by employees in exchange for the award of options or the allocation of performance shares is expensed against shareholders’ equity. The total amount expensed over the rights vesting period year is determined by reference to the fair value of equity instruments granted, the discounted value of future dividends paid over the vesting period and the staff turnover rate. At each balance sheet date, the number of options that may be exercised is reviewed. Where applicable, the impact of revising estimates is posted to the income statement with a corresponding adjustment in shareholders’ equity. Amounts received when options are exercised are credited to shareholders’ equity, net of directly attributable transaction costs. 3.5.3.8 IAS 39 distinguishes between two types of interest-rate hedge as follows: hedging of balance sheet items whose fair value ■ fluctuates with interest rates (“fair value hedge”); hedging of the risk of future cash flow changes (“cash ■ flow hedge”), which consists of setting future cash flows of a variable-rate financial instrument. Some derivative instruments attached to specific financing are classified as cash flow hedges pursuant to accounting regulations. Only the change in fair value of the effective portion of these derivatives, measured by prospective and retrospective effectiveness tests, is taken to shareholders’ equity. The change in fair value of the ineffective portion of the hedge is posted to the income statement if material. Treasury shares (IAS 32) Share-based payments (IFRS 2) Financial Instruments (IAS 39)

Non-consolidated interests 3.5.3.2.2 Non-consolidated interests are valued at fair value pursuant to IAS 39. The changes in fair value are stated as equity until the date of disposal. For long-term impairment, underlying capital losses recognized in shareholders’ equity are recorded as expenses. Other financial fixed assets 3.5.3.2.3 Loans, receivables and other financial instruments are booked according to the amortized cost method on the basis of an effective interest rate. When there is non-recoverability or default risk, this is recognized in the profit and loss statement. 3.5.3.3 Buildings relating to real estate development operations or acquired under the tax system governing properties held for rapid resale by real estate traders, legally designated as marchands de biens , are booked under inventories at their acquisition cost. An impairment test is carried out as soon as any indication of impairment is detected. In the event of such an indication and when the estimated recoverable amount is lower than the carrying amount, an impairment loss is recognized based on the difference between those two amounts. 3.5.3.4 Receivables are recorded for the initial amount of the invoice, after deduction for impairment valued on the basis of the risk of non-recoverability. The cost of non-recoverability risk is posted under property expenses. Rent receivables are systematically written down according to the due date of the receivables and situation of the tenants. An impairment rate is applied to the amount excluding tax of the receivable minus the security deposit: tenant has left the property: 100%; ■ tenant in the property: ■ receivable between three and six months: 25%, ■ receivable between six and nine months: 50%, ■ receivable between nine and 12 months: 75%, ■ over 12 months: 100%. ■ Impairment thus determined is adjusted to take account of particular situations. Receivables relating to the deferral of commercial benefits according to IAS 17 (see Note 3.5.3.13) and recognized by the difference between the economic rent and the paid rent, are subject to a specific analysis covering the ability of the tenant to effectively go to the end of the signed lease, to validate each time their basis is established. Buildings in inventory Operating receivables

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GECINA - REFERENCE DOCUMENT 2017

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