QUADIENT - 2020 Universal Registration Document

FINANCIAL STATEMENTS Consolidated financial statements

NOTE 5

ASSETS HELD FOR SALE

Discontinued operations A discontinued operation is a component operation of an entity that has either been disposed of, or is classified as held for sale and represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. When the criteria are met, the net income and the cash flow of discontinued operations are presented on a separate line in the consolidated income statements and consolidated statement of cash flow. The Group decides if a discontinued operation forms a separate major line of business or geographical region of operations substantially based on its contribution to the Group financial statements. Operations”. The goodwill had been valuated using the relative fair value method. These assets and liabilities were measured at their fair value: the net book value of assets and liabilities as at 31 January 2020 had been compared to the sale price. This led to the recognition of a depreciation booked in other operational expenses for an amount of 3.1 million euros.

IFRS 5 “Non-current assets held for sale and discontinued operations” specifies the accounting treatment applicable to assets held for sale and the presentation and disclosure of discontinued operations. Assets held for sale Non-current assets held for sale are presented separately in the statement of financial position as soon as the Group has decided to sell these assets and when the sale is considered to be highly probable. These assets are measured at the lower of the carrying amount and the fair value less costs to sell. When the Group is committed to a sale plan involving loss of control of a subsidiary, all the assets and liabilities of this subsidiary are classified as held for sale, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale. As at 31 January 2021, there are no assets and liabilities held for sale. As at 31 January 2020, assets and liabilities classified as held for sale for respectively 23.9 million euros (20.8 million euros after depreciation) and 7.2 million euros were related to ProShip, sold on 28 February 2020. This company was part of the cash-generating unit “Additional

6

OPERATING DATA NOTE 6

Sales

6-1:

6-1-1: ACCOUNTING PRINCIPLES

In accordance with IFRS 15, sales are measured at the fair value of the consideration received, net of any trade discount and volume rebates and excluding any VAT or other taxes. Sales are recognized at the date on which the Group fulfills the performance obligations attached to the contract. Lease of mailroom equipment The Quadient Group rents equipment to its customers in France, the United States and Canada under leases in which the Group does not transfer the control of the assets. Leases are generally for periods of one to five years. As the performance obligations are not separated, the lease and corresponding maintenance costs are normally billed in advance, the lease

component for the period ended is recorded in sales. The balance is shown in deferred income. Equipment sales Equipment sales are recognized when the goods are shipped. This reflects the transfer of control between the buyer and the seller of major risks and benefits inherent to the ownership of the item because: the lead times between shipping, delivery and ● installation are very short; the products are most often installed directly by the ● customer; the return rate after shipping is very low. ●

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UNIVERSAL REGISTRATION DOCUMENT 2020