GROUPAMA / 2018 Registration document

7 FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

Personnelbenefit 3.10.1 Pension commitments

for the transaction costs directly chargeable to the acquisition or issue of such debt.

The Group’s companies have different retirement schemes. The schemes are generally financed by contributionspaid to insurance companies or other funds, which are administered and valued on the basis of periodic actuarial calculations. The Group has defined-benefit schemes and defined-contribution schemes. A defined-contributionscheme is a retirement scheme under which the Group pays fixed contributionsto an independententity. In this case, the Group is not bound by any legal or implied obligation forcing it to top up the scheme in the event that the assets are not sufficient to pay, to all employees, the benefits due for services rendered during the current fiscal year and previous fiscal years. Pension schemes that are not defined contribution schemes are defined benefit schemes. This is the case, for example, for a scheme that defines the amount of the pension benefit that will be collected by an employee at retirement, which is generally a function of one ormore factors, suchas age, seniority andsalary. The liabilities recorded in the balance sheet for defined-benefit schemes and similar schemes correspondto the discountedvalue of the obligation linked to the defined-benefitschemes at closing, after deducting theclosing fair value of thescheme assets. The actuarial gains and losses resulting from experience-based adjustments and modifications in the actuarial assumptions are recognised directlyin equity. The costs of past services are immediately recognised in income, regardlessof whether the rights are ultimatelyacquired in the event of a change of pension scheme. With regard to defined-contribution schemes, the Group pays contributionsto retirement insuranceschemesand is not bound by any other payment commitment.The contributionsare booked as expenses related to personnel benefits when they are due. The contributionspaid in advance are recorded as assets to the extent that the advancepaymentresults in a reductionof future payments or a cash reimbursement. 3.11 Financial debt includes subordinated liabilities, financial debt represented by securities, and financial debt to banking institutions. In the absence of a specific IFRIC interpretation,commitments to purchase non-controllinginterests are recorded in financial debt at current fair value (strike price of the option). The cross-entry of these debts is recognisedeither in goodwill for put options granted before 1 January2010 or as a reduction in shareholders’equity for put options contracted subsequento this date. Financing debt

Valuationrules 3.11.2 Financial debt is subsequently valued at amortised cost using the effective interestrate method. Derecognition 3.11.3 Financial debt is derecognisedwhen the obligation specified in the contract is discharged, cancelled orexpires. 3.12 Classificationandmethod ofrecognition 3.12.1 There are two categories of contract issued by the Group’s insurance companies: insurance policies and financial contracts with discretionary ❯ profit sharing,which are governedby IFRS 4; financial contractswithout discretionaryprofit sharing, which are ❯ governed byIAS 39. Insurance policies (a) An insurancepolicy is a contract accordingto which one party (the insurer) accepts a significant insurance risk of another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. An insurance risk is a risk, other than a financial risk, transferred from the policyholder to the issuer. This risk is significant when an insured event may require an insurer to pay significant additional benefits whatever the scenario, with the exceptionof scenarios that lackbusiness significance. The existing accounting practices for insurance policies subject to IFRS 4 continue to be maintained, with the exception of the equalisation reserves as defined by IFRS 4 which have been annulled, provided that the reserves thus established meet the solvency tests stipulated by international standards (see paragraph 3.12.2.c). Financial contracts (b) Contracts that do not meet the definition of insurance policy as described above are classified as financial contracts. Financial contracts are broken down into two categories: financial contracts with or withoutdiscretionary profit sharing. A discretionary profit-sharing clause is defined as the contractual right held by a subscriber to receive an additional payment or another benefit, the amount or maturity of which is fully or partially at the discretion of the insurer and the valuation of which is based either on the performance of a set of contracts or a determined contract, either on the income or loss of the insurer, a fund, or any other entities having issued the contract or on realised and/or unrealised investmentreturns of a portfolio of specified assets held by the issuer. Technical operations

Initial recognition 3.11.1

Financial debts are recognisedwhen the Group becomes party to the contractual provisions of these debts. The amount of the financial debt is then equal to the fair value, adjusted if necessary

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES