PSA_GROUP_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017 Notes to the consolidated financial Statements at December 2017

FINANCING AND FINANCIAL INSTRUMENTS – MANUFACTURING NOTE 12 AND SALES COMPANIES

ACCOUNTING POLICIES 12.1. The principles governing the measurement of financial assets and liabilities within the meaning of IAS 32 and IAS 39 are described in Note 12.8.

NET FINANCIAL INCOME (LOSS) 12.2.

2017

2016

(in million euros)

Interest income (1)

42

95

Finance costs

(208)

(335)

Other financial income Other financial expenses

121

203

(196) (241)

(235) (272)

NET FINANCIAL INCOME (LOSS)

Including €30 million for the Automotive Division and Other Businesses (€85 million in 2016). (1)

Finance costs include in 2016 an exceptional charge of €65 million for the early redemption of bonds by Peugeot S.A.

Finance costs A. Finance costs are actual expense less the capitalised portion of assets in development.

2017

2016

(in million euros)

Financial costs

(337)

(447)

Foreign exchange gain (loss) on financial transactions and other

2

(15)

Finance costs incurred

(335) (216)

(462)

Of which Automotive Division and Other Businesses

(311)

Capitalised borrowing Costs

127

127

TOTAL

(208)

(335)

Capitalised borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of an item of property, plant and equipment or an intangible asset that takes at least twelve months to get ready for its intended use are capitalised as part of the cost of that asset (the “qualifying asset”). Group inventories do not meet the definition of qualifying assets under IAS 23 “Borrowing Costs” and their carrying amount does not therefore include any borrowing costs.

When funds are borrowed specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation corresponds to the actual borrowing costs incurred during the period less any investment income on the temporary investment of any borrowed funds not yet used. When funds borrowed for general corporate purposes are used to obtain a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate equal to the weighted average borrowing costs for the period of the operating segment that obtains the qualifying asset.

201

GROUPE PSA - 2017 REGISTRATION DOCUMENT