UNIVERSAL REGISTRATION DOCUMENT 2023

7 FINANCIAL STATEMENTS Annual financial statements and notes

3.2.3 Investment income and expenses Financial income includes the revenue from investments received during the fiscal year (rent, dividends, coupon payments, interest on loans and current accounts). Other investment income includes the pro ‑ rata share in the discount on the bond redemption differences and reversals of reserves for loss in value of investments. Other investment expenses include the percentage of appreciation on the differences in redemption of bonds, and the depreciation allowance and reserves for investments, and the percentage of general expenses corresponding to investment ‑ management activities. The capital gains or losses on marketable securities are determined by applying the first ‑ in first ‑ out method (FIFO), and they are recorded in the income statement. For these same securities, a reversal is made during the year they are sold for the cumulative amortisation & impairment of the premium or discount recorded up to the date of sale. In non ‑ life insurance, investment income and expenses are recorded on the non ‑ operating income statement. A portion of financial income reverting to underwriting reserves is transferred to the non ‑ life underwriting income statement on a basis prorated to the underwriting reserves and shareholders’ equity. A reserve for impairment is established when the value in use at the inventory date obtained through the valuation methods described above is less than the entry cost of those securities. LOANS When the estimate of the recoverable value of a loan at inventory is less than its gross value increased, if applicable, by the accrued interest not yet due at the close, a reserve for amortisation will be created in the amount of the difference. As a general rule, the applied available future cash flows correspond: during an explicit period corresponding to the first years, the cash flow column is based in particular on the first three years of the Group’s operational strategy planning. This is subject to a discussion process between local management and the Group; ❯ beyond the explicit horizon, the cash flow column is completed by a terminal value. This terminal value is based on long ‑ term growth assumptions applied to an updated projection of normative cash flows; ❯ the solvency margin integrated into the business plans is valued according to the prudential rules established by the Solvency 2 directive for subsidiaries in a country subject to this regulation. For the other entities, the solvency margin is assessed according to the applicable local regulations. ❯

3.2.4 Forward sale financial instruments Groupama Assurances Mutuelles has not held any forward financial instruments since 31 December 2022.

3.3 3.3.1 Other transactions Intangible assets Intangible assets consist primarily of:

3.3.2 Management fees and commissions Management fees incurred by Groupama Assurances Mutuelles are recorded according to their nature within the de facto Groupama Assurances Mutuelles group; expenses pertaining to other members of the de facto group are billed back to them. They are then classified for the presentation of the financial statements according to their purpose, by applying allocation keys. These keys are determined analytically and reviewed annually according to the Groupama Assurances Mutuelles internal structure and organisation. The management costs are classified under one of the following five categories: claims settlement costs, which specifically include claims services expenses and claims dispute expenses; ❯ acquisition expenses, which factor in a part of the commissions of the regional mutuals, commissions paid for direct business and other inward reinsurance, advertising, and marketing expenses; ❯ administrative costs, which include a portion of the commissions of the regional mutuals and management expenses for direct business and inward reinsurance; ❯ investment expenses, which specifically include investment management services, including fees, commissions, and brokerage commissions paid; ❯ other operating expenses, which include expenses that cannot be assigned directly or by applying a cost to one of the other categories. ❯ The software carries a reserve, if necessary, to recognise an additional impairment deemed to be irreversible at the year ‑ end. IT development expenses amortised over a period of 5 to 7 years by the straight ‑ line method; ❯ acquired software amortised over a period of 1 to 4 years by the straight ‑ line method; ❯ developed software amortised over a period of 3 or 4 years by the straight ‑ line method. ❯ Expenses arising from activities with no operating connection with the insurance business are reported as other non ‑ operating expenses.

330

Universal Registration Document 2023 GROUPAMA ASSURANCES MUTUELLES