GROUPAMA / 2019 Universal Registration Document

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Fair value, less sales costs, is computedas follows, in accordance with therecommendations of IAS 36 (§ 25 to 27): the salesprice shown in a final salesagreement; ● the marketvalue lessselling costs if there is an active market; ● otherwise, the best possible information, with reference to ● comparable transactions. Value in use corresponds to the current expected value of future cash flows tobe generatedby the cashgeneration unit. Goodwill, recorded at the initial business combination,the value of which is not material or requires disproportionatevaluationwork in relation to itsvalue, isimmediatelyexpensedin the year. An impairmentof goodwill recognisedduring a previous fiscal year may notbe subsequentlywrittenback. If the acquirer’s interest in the net fair value of the identifiable assets, liabilities and reserves exceeds the acquisition cost of the Company’s shares, the identification and valuation of the assets, liabilities and reserves and the valuation of the cost of the combination is reassessed. If, after this revaluation, the share acquired remains greater than the acquisition cost, this excess is immediatelyrecognisedin income. If an entity is taken over, a sale optionmay be grantedto holdersof non-controlling interests. The option to sell results in the Group’s obligation to buy the securities held by the minority holder at a specified strike price and at a future date (or period of time) if the minority holder exercises its right. This obligation is reflected in the financial statements by a debt valued at the strike price of this discounted right. The offset of this debt, equal to the price of the option (value of the share), is recognised in goodwill for put options granted before 1 January2010 or as a reductionof non-controllinginterestsand/or group’s equity forput optionscontracted subsequent to this date. 3.1.2 Intangible fixed assets are identifiable assets, controlled by the entity because of past events and from which future economic benefits are expected for the entity. They primarily include values in force and investment contracts, customer relations values and network values and brands, determined during business combinations, as well as software acquired and developed. Amortisable intangible insurance assets (specifically including values in force and investment contracts, the value of customer relationsand the value of the networks)are depreciatedas margins are discharged over the lifetime of the policy portfolios. A recoverabilitytest is performedeach year,basedon experienceand anticipated changes in major assumptions, and may result in impairment. Other intangible assets

Software acquired and developed has a finite lifetime and is generally amortisedon a straight-line basisover that lifetime. Other intangible assets that do not have a finite lifetime are not

amortised butdo routinely undergo an impairment. Start-upcosts areexpensed rather thancapitalised.

Insurance business investments 3.2 Investmentsand any impairmentthereon are valued in accordance with IFRS basedon the asset classof the investments. 3.2.1 Equities, bonds, loans and receivables, derivatives and bank accounts are considered financial assets. Classification (a) Financial assets are classified in one of the following four categories: there are two typesof assets at fairvalue throughincome: ● investmentsheld for trading, which are investmentsfor which ● the management intention is to generate income in the short term. If there have been short-term sales in the past, such assets may also be classified in this category, financial assets designatedas optional (held for trading or fair ● value option), provided they comply withthe followingcriteria: asset/liability matching to avoidany accounting mismatch, - hybrid instruments including one or more embedded - derivatives, group of financial assets and/or liabilities that are managed - and the income of which isvaluedat fair value; assets held to maturity include fixed-term investments that the ● Company expressly intends, and is able, to hold until maturity. The Group does not use this category, with the exception of certain perfectly backed portfolios that meet the criteria defined above; the category of loans and receivables includes assets with a ● defined payment or a payment that can be defined, which are not listed for trading on anactive market; available-for-sale assets (stated at fair value via shareholders’ ● equity) include by default all other fixed-term financial investments,equities,loans and receivablesthat are not included in the other categories. Reclassifications (b) A financial asset may, under exceptional circumstances, be reclassified outside the category of investments held for trading. Financial assets

151 Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES