LEGRAND / 2018 Registration document

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APPENDIX APPENDIX 1

Notes to the financial statements

Detailed table of contents

NOTE 7 – PROVISIONS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 341

352

NOTE 8 – DEBT AND OTHER LIABILITIES

NOTE 2 – ASSETS

353

343

NOTE 9 – NOTES TO THE STATEMENT OF INCOME

NOTE 3 – RECEIVABLES

354

344

NOTE 10 – OTHER INFORMATION

NOTE 4 – MARKETABLE SECURITIES

354

344

NOTE 11 – SIGNIFICANT EVENTS OF THE YEAR

NOTE 5 – ACCRUALS

356

344

NOTE 12 – SUBSEQUENT EVENTS

NOTE 6 – EQUITY

356

345

R NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 ACCOUNTING PRINCIPLES AND POLICIES The financial statements have been prepared in accordance with French generally accepted accounting principles, applied consistently from one year to the next, under the historical cost convention. INTANGIBLE ASSETS Intangible assets correspond to software, which is amortized over 3 years. The difference between book amortization and amortization calculated over 12 months for tax purposes is recorded in equity under “Untaxed provisions”. INVESTMENTS Investments correspond primarily to investments in subsidiaries and affiliates, which are stated at the lower of cost and fair value. Fair value is determined by reference to Legrand’s equity in the investee’s revalued net assets, as adjusted to reflect its earnings performance and growth outlook. 1.2 1.3

W Shares acquired specifically for allocation to employees are classified under “Marketable securities” as “Treasury shares”; W Shares acquired for cancellation or for any other purpose are classified under “Other investments” as “Treasury shares held for cancellation” or “Treasury shares”; W Shares purchased in connection with a liquidity contract are also recorded under “Other investments” as “Treasury shares”; W Cash and short-term investments held in the liquidity account are classified under “Other investments” as “Other long-term receivables”. 1.4.2 Impairment of treasury shares Treasury shares held for cancellation are stated at cost. Treasury shares held for other purposes are stated at the lower of cost and fair value, with fair value corresponding to the average share price for the last month of the fiscal year. A provision is recorded for any unrealized losses. The loss incurred when treasury shares are sold to employees is recorded under non-recurring expense.

1.4

SHARE BUYBACKS AND LIQUIDITY CONTRACT

1.4.1 Accounting registration Legrand shares acquired under share buyback programs are classified in accordance with recommendation 98-D released by the Urgent Issues Task Force of the French National Accounting Board ( Comité d'Urgence du Conseil National de la Comptabilité ), based on the purpose for which they were purchased.

A

341

LEGRAND

REGISTRATION DOCUMENT 2018