GROUPAMA / 2018 Registration document

FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

Operationscarried out by the Group may have positive or negative tax consequences other than those taken into consideration for calculating the payable tax. The result is tax assets or liabilities classified as deferred. This is particularly the case when, because of completed transactions that are posted in either the individual company statements or only in the consolidated accounts as restatements and eliminations of inter-company income or losses, differences will appear in the future between the tax income and the accounting income of the Company, or between the tax value and the book value of an asset or liability, for example when transactions performed during a fiscal year are taxable only in the following fiscal year. These differences are classified as timing differences. All deferred tax liabilities must be recognised; however, deferred tax assets are only recognised if it is likely that taxable income (against which these deductibletiming differencescan be charged) will be available. All deferred tax liabilities are recognised. Deferred tax assets are recognised when their recovery is considered as “more probable than improbable”, i.e., if it is likely that sufficient taxable income will be available in the future to offset the deductibletiming differences. In general, a 3-year horizon is considered to be a reasonable period to assess whether the entity can recover the capitalised deferred tax. However, an impairment charge is booked against the deferredtax assetsif their recoverabilityappears doubtful. Deferred tax assets and liabilities are computedon the basis of tax rates (and tax regulations), which have been adopted as at the balance sheet date. Deferred tax assets and liabilities are not discounted to present value. 3.14 A business segment is a component of an entity whose operating profits are regularly examined by the Group’s principal operational decision-makers in order to assess the segment’s performance and decide on the resources to allocate to it. The Group is organised into three operationalsegments: insurance in France, international insurance, and banking and financial businesses. The banking and financial activity segment, which is also the subject of specific notes (Notes 10.1,10.2, and 33.2), has been grouped with the insurance segment in France in order to Segment reporting

Financial contracts under IAS 39 3.12.3 Liabilities related to financial contracts without discretionary profit sharingmust be recognisedon the basis of the principle of deposit accounting. Thus the premiums collected and the benefits are booked in the balance sheet. Managementcharges and expenses for the contracts are recorded in income. Unearned income is deferred overthe estimated life of thecontract. This category primarily includes unit-linked policies and indexed policies that do not meet the definition of insurance policies and financial contracts with discretionary profit sharing. Commitments under these policies are valued at the unit-linked fair value in inventory. The additional costs directly related to management of the investments of a contract are booked as assets if they can be identified separately and reliably valued, and if it is probable that they will be recovered. This asset, which corresponds to the contractual right acquired by the Group on earnings resulting from the managementof investments, is amortised over the duration of this management and symmetrically with recognition of the corresponding profit. Inward reinsuranceis booked treaty by treaty without differenceon the basis of an assessment of the business accepted. These operations are classified according to the same rules as those described for insurance policies or financial contracts in paragraph 3.12.1.In the absence of sufficient informationfrom the outward reinsurer,estimatesare made. An asset deposit is recorded for the amount of the counterparty given to the cedingand retroceding companies. Securities used as hedges are recorded in the statement of commitments givenand received. Outward reinsurance (b) Outward reinsuranceis recognisedin accordancewith the terms of the various treaties and according to the same rules as described in Note 3.12.1 on insurance policies and financial contracts. A liabilities deposit is recorded for the amount of the corresponding asset received from outward reinsurers andretrocessionaires. Securities from reinsurers (outward reinsurers and retrocessionaires) remitted as collateral are recorded in the statement ofcommitments givenand received. 3.13 Corporate income tax includes all current and deferred taxes. When a tax is payable or receivable and payment is not subject to the execution of future transactions, such tax is classified as current, even if the payment is spread over several fiscal years. It appears asan asset or liability inthe balancesheet as applicable. Reinsurance operations 3.12.4 Inward reinsurance (a) Taxes

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create anoverall operational segment entitled France. The variousactivitiesof each segmentare as follows:

Life and health insurance The life and health insurance business covers the traditional life insurance business as well as personal injury (largely health risks, disability andlong-term care).

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES