EURONEXT_Registration_Document_2017

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FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

Property, Plant and Equipment Property, plant and equipment is carried at historical cost, less accumulated depreciation and any impairment loss. The cost of purchased property, plant and equipment is the value of the consideration given to acquire the assets and the value of other directly attributable costs. All repairs and maintenance costs are charged to expense as incurred. Property, plant and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets, except land and construction in process assets, which are not depreciated. The estimated useful lives, which are reviewed annually and adjusted if appropriate, used by the Group in all reporting periods presented are as follows: Buildings (including leasehold improvement 5 to 40 years; IT equipment 2 to 3 years; Other equipment 5 to 12 years; Fixtures and fittings 4 to 10 years. Goodwill represents the excess of the consideration transferred in a business combination over the Group’s share in the fair value of the net identifiable assets and liabilities of the acquired business at the date of acquisition. Goodwill is not amortised but is tested at least annually for impairment, or whenever an event or change in circumstances indicate a potential impairment. For the purpose of impairment testing, goodwill arising in a business combination is allocated to the cash-generating units (“CGUs”) or groups of CGUs that are expected to benefit from the synergies of the combination. Each CGU or CGU group to which goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes. The carrying value of a CGU group is compared to its recoverable amount, which is the higher of its value in use and its fair value less costs of disposal. Impairment losses on goodwill are not subsequently reversed. Value in use is derived from the discounted future free cash flows of the CGU group. Fair value less costs of disposal is based on discounted cash flows and market multiples applied to forecasted earnings. Cash flow projections are based on budget and business plan approved by management and covering a 2-year period in total. Cash flows beyond the business plan period are extrapolated using a perpetual growth rate. Key assumptions used in goodwill impairment test are described in Note 17. (ii) Internally Generated Intangible Assets Software development costs are capitalised only from the date when all of the following conditions are met:  the technical feasibility of the development project is demonstrated;  it is probable that the project will be completed and will generate future economic benefits; and  the project development costs can be reliably measured. Capitalised software development costs are amortised on a straight- line basis over their useful lives, generally from 2 to 7 years. Other Goodwill and other Intangible Assets (i) Goodwill

development expenditures that do not meet these criteria, as well as software maintenance and minor enhancements, are expensed as incurred. (iii) Other Intangible Assets Other intangible assets, which are acquired by the Group, are stated at cost less accumulated amortisation and impairment losses (if applicable). The estimated useful lives are as follows: Purchased software and licenses: 2-5 years; Customer relationships: 17-18 years; Brand names: indefinite. Assets that are subject to amortisation and depreciation are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Assets that have an indefinite useful life are not subject to amortisation nor depreciation and are tested at least annually for impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. For purposes of assessing impairment, assets are grouped into cash generating units (“CGUs”). A CGU is the smallest identifiable Group of assets that generates cash inflows that are largely independent from other groups of assets. Non-financial assets, other than goodwill, that were previously impaired are reviewed for possible reversal of the impairment at each reporting date. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value at each balance sheet date. The method of recognising the resulting gain or loss depends on whether or not the derivative is designated as a hedging instrument for accounting purpose, and if so the nature of the item being hedged. In order to qualify for hedge accounting, a transaction must also meet strict criteria as regards to documentation, effectiveness, probability of occurrence and reliability of measurement. To date, the Group did not elect to apply hedge accounting and, accordingly, gains and losses on remeasurement of derivatives instruments are systematically recognised in profit or loss, within financial income and expense. Financial Assets Upon initial recognition, the Group classifies its financial assets in one of the categories described hereafter. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and, in the case of assets classified as held-to- maturity, re-evaluates this designation at the end of each reporting period. See Note 30 for details about Euronext’s financial assets. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial Impairment of Non-financial Assets other than Goodwill Derivative Financial Instruments and Hedging Activities

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2017 REGISTRATION DOCUMENT