GROUPAMA / 2019 Universal Registration Document

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Due to the use of the simplified retrospective method, the application of IFRS 16 has no impact on the Group’s opening group’s equity at 1 January 2019. In terms of the impact of the standardon the presentationof the balance sheet, the amounts of the rental liability and the right of use recognisedat 1 January2019 both amount to €200 million. The difference between the amount of rental liability recognisedas at 1 January 2019 and the amount of commitments arising from operating leases presented under IAS 17 at 31 December 2018 correspondsto the discounting of these commitmentsand to the fact that the commitments identified at 31 December 2018 of €302 million correspond to all property lease commitments, including those for which a simplificationmeasure was applied at the transition. Regarding IFRS 9 on financial instruments and its amendment “Prepayment features with negative compensation”, the Group chose to defer their application in accordance with IFRS 4 “Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts”,which allows groupswhosemain business is insurance to defer the application of IFRS 9 at the latest until the annual periodsbeginningon or after 1 January2021. The Groupmeets the eligibility criteria defined in the amendmentto defer the application of IFRS 9. The rules for application of IFRS 9 and its potential impact on the Group’s consolidated financial statements are currently under review. The Grouphas chosento opt for the temporaryexemptionfrom the rule on uniformity of accounting policies ordinarily required by IAS 28 and providedfor in paragraph 20 O (b)of the amendmentto IFRS 4 “Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts”. This amendment allows insurance groups that have elected to defer application of IFRS 9, and that consolidate their related companies using the equity method to preserve the financial statements prepared by such related companies for the purposes of producing their consolidated financial statements. IFRS 17 on insurance contracts, published in May 2017 by the IASB and intended to replace the current IFRS 4, has not yet been adopted by the European Union. Work to identify problems in implementing this standard and its potential impact on the consolidatedfinancialstatementsis currently in progress.This work is being carried out in conjunctionwith the IFRS 9 impact analysis and includes the IASB’s provisionaldecision from November 2018, confirmed by the IASB’s Exposure Draft on the IFRS 17 amendment of June 2019, to defer the entry into force of both IFRS 17 andIFRS 9by one year to 1 January2022. Decisions taken by the Group are based particularly on the January 2007 summary of the work undertaken by the CNC workinggroups on the specificsof implementingIFRS by insurance providers. Subsidiaries, joint ventures, and related companies of the consolidation scope are consolidated within the scope in accordancewith the provisionsof IFRS 10,IFRS 11, andIAS 28.

The Group adopted IFRS for the first time for the preparationof the 2005 financial statements. All amounts on the consolidated balance sheet, the consolidated income statement, the statement of net income and gains (losses) recognised directly in group’s equity, the statement of changes in group’s equity, the cash flow statement, and the notes are in millions of euros unless otherwise indicated. These amounts are rounded. Rounding differencesmay exist. In order to prepare the Group’s financial statementsin accordance with IFRS, Groupama’smanagementmust make assumptionsand estimates that have an impact on the amount of assets, liabilities, income, and expenses as well as on the drafting of the related notes. These estimatesand assumptionsare reviewedon a regular basis. They are based on past experience and other factors, including future eventswhich can be reasonablyexpectedto occur under the circumstances. Final future results of operations for which estimates were necessary may prove to be different and may result in an adjustment to thefinancial statements. The judgementsmade by managementpursuant to the application of IFRS primarilyconcern: initial valuation and impairment tests performed on intangible ● assets, particularly goodwill (paragraphs 3.1.1 and 3.1.2); evaluation of technical reserves (paragraph 3.12); ● -estimationof certain fair values on unlisted assets or real estate ● assets (paragraphs 3.2.1 and 3.2.2); estimation of certain fair values of illiquid listed assets ● (paragraphs 3.2.1); recognition of profit-sharing assets (paragraphs 3.12.2.b) and ● deferred tax assets (paragraph 3.14); calculation of reserves for contingencies and charges and ● particularly valuation of employee benefits (paragraph 3.10). Scope and methods of consolidation 2.3.1 A company is included in the consolidation scope once its consolidation,or that of the sub-groupwhich it heads, whether on a stand-alone basis or with other consolidated businesses, is material in relation to the consolidated financial statements of all companies included in the scope of consolidation. In accordance with the provisions of IAS 10 and IAS 28, mutual funds and property investment companies are consolidatedeither through full consolidationor through the equity method. Control is examined for each mutual fund on a case-by-case basis. Non-controllinginterests pertaining to mutual funds subject to full consolidationare disclosed separately as a special financial liability item in the IFRS balancesheet. Underlying financial assets appear in the Group’sinsurance activity investments. Consolidation principles 2.3

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES

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