NATIXIS_REGISTRATION_DOCUMENT_2017

5 FINANCIAL DATA

Parent company financial statements and notes

They are recognizedat their acquisitiondate at the purchase price excludingacquisitioncosts. These securities are valued individually at the lower of their value in use at the reporting date and their acquisitioncost. Unrealizedlossesare subjectto a provisionfor impairment. investments in subsidiaries and affiliates: shares and j other variable-incomesecurities in related corporate entities over which Natixis exercisesexclusivecontrol, i.e. corporate entities likely to be fully consolidatedin Natixis’consolidation scope. They are recognizedat their acquisitiondate at the purchase price excludingacquisitioncosts. These securities are valued individually at the lower of their value in use at the reporting date and their acquisitioncost. Unrealizedlossesare subjectto a provisionfor impairment. The measurement approaches used to determine value in use are the following,as appropriate: the net assetmethod(restatedor not); a the peer comparisonmethod; a the discountedfuturecash flows (DCF)method; a the stockmarketpricemethod; a or a combinationof thesemethods. a The DCF method for measuring future cash flows is based on the establishment of business plans prepared by the management of the subsidiaries in question and approved by Natixis’ senior management. The discount rate on future cash flows is the result of: an average rate of return on an investment deemed to be a risk-free; an averagecredit spread on the market in which the subsidiary a is listed; an average beta as reflected in a sample of equivalent a companies. Treasury shares: Natixis holds treasury shares to regulate its a share price under a liquidity agreement. These shares are recognized as securities held for trading and follow the same rules as other securities in this category. Moreover, treasury shares acquired through arbitraging on stock market indexes are recognizedas securitiesheld for trading. Treasury shares held for distributionto employeesare classified as held for sale and followthe correspondingrules. Income, value adjustments and proceeds on disposal of securitiesportfoliosare recognizedas follows: income from variable-incomesecurities is recognized as and a when received or when the payment has been subject to a resolutionat a Shareholders’Meeting; income from fixed-income securities is recognized based on a the accrualmethod;

value adjustmentsand proceedsfrom the disposalof securities a are recognized under different headings depending on which portfoliothey belongto: under “Net revenues” for securities held for trading and j securitiesheld for sale, as a provisionfor credit losses on fixed-ratesecurities in the j portfolio of securities held for sale or for investment when adjustmentsin value relate to counterpartyrisk exposure, under net gains/(losses)on fixed assets: j for adjustments in the value of securities held for j investment (excluding impairment for risk exposure to a counterparty)when there is a high probabilityof disposalof such securities held for investment due to unforeseen circumstances and for all proceeds from the disposal of securitiesheld for investment; for investments in associates, investments in subsidiaries j and affiliatesand other long-termsecurities. Reclassifications from the “held for trading” to the “held for sale” and “held for investment” categories and from “held for sale” to “held for investment” are permitted in exceptional marketcircumstancesrequiringa change in strategyor when the securities in question have ceased to be tradable on an active marketsince their acquisition. The regulation allows banks to sell all or part of the securities reclassified as “held for investment” if the following two conditions are met: the transferwasmotivatedby exceptionalcircumstances, a the marketfor these securitieshas becomeactive again. a Natixis has carried out no such transfers in its separate financial statements. intangible assets Fixed assets are recognized at acquisition cost plus directly attributabletransactioncosts and borrowingcosts accruedduring any phase of constructionor installation before they come into service. Internally generated software is carried on the asset side of the balance sheet at its direct development cost, including outsourcingexpensesand personnelcosts directlyattributableto its production and preparationwhere they meet the criteria for capitalization. After acquisition, fixed assets are carried at cost less any cumulativewrite-down,amortizationand impairmentlosses. As soon as they are in a condition to be used by Natixis in the manner in which they are intended,fixed assets are depreciated or amortizedover their estimateduseful lives on a straight-lineor declining balance basis when this better reflects the economic amortization.The residualvalue of the asset is deductedfrom its depreciable or amortizable amount when it can be measured reliably. Property, plant and equipment and 3.

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Natixis Registration Document 2017