GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Investments in related companies and joint ventures Investmentsin associatesand joint venturesare consolidatedusing the equity method. At the time of acquisition, the investment is recorded at the acquisition cost and its net book value is subsequently raised or reducedto take into account particularlythe income or losses as well as the change in fair value of financial assets in proportion to the investor’s stake. 3.4 Non-current held-for-sale assets and discontinued businesses A non-currentasset (or a group intended to be sold) is considered to be held for sale if its book value will be mainly recoveredthrough a sale transaction rather than through continued use. In order for this to be the case, the asset (or the group intended to be sold) must be availablefor immediatesale in its current state, and its sale must be highly probable (within the next 12 months). Non-current assets (or a group intended to be sold) classified as held for sale are valued at the lower value between the net book value and the fair value minus transfer costs. Where there is an unrealised capital loss, impairment is recognised in the income statement. In addition, non-currentassets cease to be depreciated once they are reclassified as held-for-sale assets. A discontinued activity is considered to include any component from which the entity is separated or that is classified as held for sale and is in one of the following situations: it constitutes a major, separate line of business or geographical ❯ area; or it is part of a single, coordinatedplan for divestment of a line of ❯ business or a major, separate geographical area; or it is a subsidiary acquired exclusively in order to be sold. ❯ The following are presented on a particular line of the income statement: net income after taxes from discontinued businesses until the ❯ transfer date; profit or loss after taxes resulting from the divestment and ❯ measurement at fair value less the costs of the sale of the assets and liabilities constituting the discontinued businesses. 3.5

Assets related to the right to use leased operating property are initially recognisedat cost, comprisingthe initial amountof the lease liability, any prepayments made to the lessor net of any benefits received from the lessor, the initial direct costs incurred by the lessee in contractingthe lease agreement and the estimatedcosts of dismantling or restoring the leased property. User rights are amortised using the straight-line method over the term of the lease agreement. The lease term equates to the non-cancellableperiod of each lease plus the periods covered by renewal options where it is reasonably certain these will be exercised, and termination options that the lessee is reasonably certain not to exercise. The estimation of this lease term takes into account the useful life of the significant improvements made and inseparable from the leased property. The Group has chosen to apply the optional treatmentstipulatedin IFRS 16 for rental agreementsof less than 12 months’durationand contracts involving low-value assets, recognisingthe rent for these under expenses in the income statement. Other property, plant, and equipment 3.6.2 Directly-ownedproperty, plant and equipmentother than operating property are initially recorded at acquisitioncost, which consists of the purchase price, customs duties, discounts and rebates, direct costs necessary for installation and payment discounts. The depreciation methods reflect the method of economic consumption. An impairment test is conducted once there is an indication of a loss of value. The impairment loss is reversibleand correspondsto the surplusbetweenthe book value over the realisablevalue, which is the higher of net fair value of withdrawal costs and the value in use. The recognition and valuation method for user rights on other property, plant and equipment owned by the lessee under a lease is identical to the method described for user rights on investment property. and payables, other assets and other liabilities Operating receivablesand other assets are recordedat face value, taking into account any transaction costs. Operating payablesand other liabilitiesare recordedat the fair value of the consideration received in exchange at the origin of the contract, net of transaction costs. Moreover, non-controlling interests in fully consolidated mutual funds are included in other liabilities. Under IAS 32, a financial instrument that gives the holder the right to return it to the issuer in exchange for cash is a financial liability. The change in this liability is recognised through the income statement. Operating receivables 3.7

Tangible fixed assets

3.6

Operating property 3.6.1 The Group has chosen to value directly-ownedoperating property using the cost method. This property is presented on a line separate from Investment property as assets. The recognitionand valuation method is identical to the method described for investment property.

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES