SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

PARENT COMPANY FINANCIAL STATEMENTS Accounting principles and policies

2.7. Revenue

The duration of use of goodwill is presumed to be unlimited. The Company writes down the value of an asset if its current value (the higher of market value and value in use) is less than its carrying amount. Goodwill is allocated to a group of assets so that it can be tested at a level of relevance that enables its performance to be tracked. Previously recognised write-downs are definitive and may not be reversed. 2.4. Technical losses due to a merger After allocation, technical losses arising from a merger are recognised in a specific account by the relevant asset category to facilitate their monitoring over time in the following categories: p “Merger loss on intangible assets” p “Merger loss on property, plant and equipment” p “Merger loss on financial assets” p “Merger loss on current assets” The technical merger loss is depreciated using the same rules and under the same terms as the assets to which it is allocated. Each share of the merger loss allocated to an underlying asset is written down when the current value of the underlying asset becomes less than its carrying amount, plus the share of the merger loss allocated. The impairment loss is charged firstly to the share of the technical merger loss. Goodwill impairment therefore also includes impairment losses charged to the part of the technical merger loss allocated to goodwill. 2.5. Property, plant and equipment Property, plant and equipment is recognised in the balance sheet at purchase cost. Depreciation is calculated using the straight-line method over the useful lives assigned to each category of fixed assets.

2.7.1. CONSULTING AND SYSTEMS INTEGRATION

Technical assistance, consulting, training and projects provided on a time and materials basis These services are recognised when performed, which generally means when invoiced. Operations are reviewed at each balance sheet date: p services already performed but not yet, or only partially, invoiced are measured on the basis of the contractual billing rates and billable time. They give rise to revenue recognition, with a corresponding entry to Accrued income reflected in the balance sheet as part of Trade accounts receivable ; p services already billed but not yet entirely performed are deducted from invoiced revenue and included in the balance sheet as Deferred income within Other liabilities, accruals and deferred income . Services covered by fixed-price contracts Fixed-price contracts are characterised by commitments relating to the price, the end result and the deadline. Services performed under such contracts are usually recognised as follows using the percentage- of-completion method: p revenue and profit generated by a contract are recognised on the basis of a technical assessment, in line with the Group’s quality procedures, of the contract’s degree of completion. During performance of a project, this assessment is generally based on 90% of the contract amount with the remaining 10% deferred until completion; p the amount of revenue recognised at each balance sheet date is based on the difference between 90% of the contract value and the amount required to cover the total number of man-days remaining to be performed. This amount is included in the balance sheet as Accrued income within Trade accounts receivable . Payments on account received are included under Other liabilities, accruals and deferred income . Moreover, costs incurred in the start-up phase of a contract may be recognised in the balance sheet as work-in-progress when they relate to future activities of the contract and provided it is probable that they will generate future economic benefits. Should a contract become loss-making, losses at completion are systematically recorded in Provisions for contingencies and losses . 2.7.2. SOFTWARE AND SOLUTIONS Services provided within the scope of Software and Solutions operations include: p the right of use under licence of the software and solutions provided; p maintenance; p ancillary services: installation, configuration, adjustments, training, etc.

Buildings

25 years 10 years

Fixtures and fittings

Hardware and equipment

3 to 5 years

Vehicles

5 years

Office furniture and equipment

5 to 10 years

2.6. Equity interests Equity interests are recognised at cost.

At each year-end, an impairment loss is recognised whenever the carrying amount exceeds the value in use. When the carrying amount is greater than the proportionate share of net assets, the value in use is determined on the basis of discounted future cash flows derived from the one- to five-year business plans drawn up by management less any debt of the entity concerned.

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SOPRA STERIA REGISTRATION DOCUMENT 2017