TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

BORROWINGS Borrowings are initially recognized at fair value. Borrowings are subsequently stated at amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of operations over the period of the borrowings using the effective interest rate method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

In accordance with IFRS 13 – Fair Value measurement, 3 levels of fair value measurement have been identified for financial assets & liabilities: level 1: quoted prices in active markets for identical assets or ■ liabilities that the entity can access at the measurement date;

level 2: internal models with observable parameters including the ■ use of recent arm’s length transactions (when available), reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models, making maximum use of market inputs and relying as little as possible on entity-specific inputs; level 3: internal models with non-observable parameters. ■

Fair value measurement by accounting categories as of December 31, 2017

Fair value through profit & loss

Derivative instruments (see note 8.5)

December 31, 2017

Amortized costs

Fair value through equity

Fair Value measurement

December 31, 2016

(in million euros)

Investments and available-for-sale assets Cash collateral & security deposits

17

-

-

17

-

Level 2

19

15

-

15

-

-

Level 1

24

Loans & others

4

4

- -

- -

- -

- -

15 39

Other non-current financial assets Total non-current financial assets

19

-

36

-

-

-

-

-

58

Cash collateral and security deposits Other financial current assets

8

-

8

-

-

Level 1

10

2

2

- -

- - - - - - - - - -

- - - - - - - -

-

4 3

Derivative financial instruments

-

-

Level 2

Other financial current assets

10

- - - - -

-

-

17

Cash

274

274

Level 1 Level 1

229 142 371 388

Cash equivalents

45

45

Cash and cash equivalents Total current financial assets

319 329

- - - - -

- - -

Borrowings (1)

(1,097)

(1,097)

(1,050)

Other current financial liabilities

(1)

- -

(1)

Level 2

(2)

Total financial liabilities (1,052) Borrowings are recognized at amortized costs. The fair value of the Group debt is €1,108 million as of December 31, 2017 (€1,081 million as of December 31, 2016). This fair value (1) is based on quoted prices in active markets for term loan debts (Level 1). (1,098) - -

Some cash collaterals for U.S. entities are classified as current because of their short maturity but are renewed automatically for periods of 12 months.

Trade payables and receivables are financial assets and liabilities according to IAS 32/39 and recognized at amortized costs.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017