PSA - 2019 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2019 Notes to the Consolidated Financial Statements at 31 December 2019

Hedginginstruments B. In IFRS 9, as in IAS 39, derivativeinstrumentsare recognisedat theirfair valueon the statementof financialposition.Theymaybe classifiedas hedginginstruments if: at the inceptionof the hedge there is formal designationand n documentation of the hedgingrelationship; the effectivenessof the hedgingrelationship is demonstratedat n inception.If the hedgingrelationshipceasesto meet the hedge effectivenessrequirementrelating to the hedge ratio but the risk management objective for that designated hedging relationship remains the same, this ratio must then be rebalanced. Rebalancing consists in adjusting either the designated quantities of the hedged item or the hedging instrumentof an alreadyexistinghedgingrelationship. The Groupuses twohedgingrelationships: fair valuehedges: n Gains and losses arising from remeasurementat fair value are recognised in profitor loss,andare offsetby the effectiveportion of the loss or gainarisingfromremeasurement at fair valueof the hedginginstrument;

cash flowhedges: n The effectiveportionof the change in fair value of the hedging instrument is directly recognised in “other amounts of comprehensiveincome”. The change in value of the ineffective portion is recognised in “other financial income or expenses”, excludingthe time value of optionswhich is now recognisedin “otheramountsof comprehensive income”.Cumulativegainsand lossesrecognisedin equityare reclassifiedto profitor loss in the same way as the recognitionof the hedged items when they affectprofitor loss.Givenits non-materiality, the effectiveportion of changesin fair valueof hedgingfor rawmaterialspurchasesis not included in the value at which the raw materials are recognised in inventory. IFRS 9 now allows for recognisinghedgingof the raw materials portions, which helps accounting to better correspond to economicreality. Since 1 January2018, this allows the Group to extend hedging in compliancewith its managementrules (see Note 12.7.A.(5) to the 2017consolidated financial statements). Besides, the Group implements currency hedges to protect against changes in the value of payables and receivables denominatedin foreign currencies.Changes in the fair value of these derivativesare recognisedin profit or loss, offsettingthe change in payables and receivables denominated in foreign currencies,to the extent of hedge effectiveness.The ineffective portion isrecognised in netfinancial income (expense).

Details ofvalues of hedging instruments and notional amounts hedged (1) Manufacturing and sales companies

31 December 2019

Carrying amount

Maturity

Notional amount

Assets Liabilities

< 1 year 2 to 5 years

> 5 years

(in million euros)

Currency risk Fair value hedges Cash flow hedges Total currency risks Interest rate risk Fair value hedges Cash flow hedges Total interest rate risks

30

(104)

3,612 3,550 7,162

3,423 2,647

189

- - - - - - - - -

9

(1)

903

39

(105)

6,070 1,092

- - -

-

62

-

62

(12) (12)

745 807

31 31

714 776

Commodity risk Cash flow hedges

68 68

(35) (35) (152)

910 910

429 429

481 481

Total commodity risks

TOTAL

107

8,879

6,530 2,349

Of which: TOTAL FAIR VALUE HEDGES TOTAL CASH FLOW HEDGES

30 (104)

3,674 5,205

3,423 3,107

251

- -

77

(48)

2,098

Hedginginstrumentsthat are not subjectto compensationclausesin caseof defaultby eitherpartydo not representa significantamount for theAutomotive division.

229

PSA - GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT