EURONEXT_Registration_Document_2017

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FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

Classification of Investments in Associates The Group classifies the interest in LCH S.A. as an investment in associate suggesting significant influence even though it owns less than 20% of the voting rights (see Note 7). The Group concludes it has significant influence over this investment, which is derived from the governance structure that was put in place and the Group’s position as the largest customer and sole minority shareholder of LCH S.A.. The Group may structure its business combinations in a way that leads to recognition of contingent consideration to selling shareholders and/or buy options for equity held by non-controlling interests (see Note 5). Contingent consideration and buy options are recognized at fair value on acquisition date. When the contingent consideration or buy optionmeets the definition of a financial liability or financial instrument, it is subsequently re-measured to fair value at each reporting date. The determination of fair value is based on the expected level of EBITDA over the last 12 months that precede the contractual date (in case of contingent consideration) or exercise date of the underlying call- and put options (in case of buy option). The Group monitors the expected EBITDA based on updated forecast information from the acquired companies involved. Purchase Price Allocation The cost of other intangible assets that are acquired in the course of business combinations, corresponds to their acquisition date fair values. Depending on the nature of the intangible asset, fair value is determined by application of:  market approach (by reference to comparable transactions);  income approach (Relief-from-Royalty- or Multi-period Excess Earnings Method;  cost approach. Assets with a finite useful life are amortized using the straight-line method over their expected useful life. Assets with an indefinite useful life are tested for impairment at least once a year. Derivatives Clearing agreement On 14 October 2013, the Group entered into a clearing agreement with LCH SA in respect of the clearing of trades on our continental Europe derivatives markets (the “Derivatives Clearing Agreement”). Under the terms of this Derivatives Clearing Agreement Euronext agreed with LCH SA to share revenues and receives clearing fee revenues based on the number of trades on these markets cleared through LCH SA. In exchange for that we have agreed to pay LCH SA a fixed fee plus a variable fee based on revenues. The definition of the accounting treatment of this agreement requires significant management judgment for the valuation and weighting of the indicators leading the principal versus agent accounting analysis. Based on all facts and circumstances around this arrangement, management has concluded that Euronext is ‘principal’ in providing Derivatives clearing services to its trading members. Therefore Euronext recognizes (i) the clearing fees received are classified as Contingent Consideration and Buy Options Resulting from Business Combinations

post trade revenues, and (ii) the fixed and variable fees paid to LCH SA as other operational expenses. Reference is also made to ‘Changes in accounting policies and disclosures’, with regards to the implication of new IFRS 15 ‘Revenue from contracts with customers’ under ‘Principle versus agent considerations’. Changes in Accounting Policies and Disclosures The International Accounting Standards Board (“IASB”) continues to issue new standards and interpretations, and amendments to existing standards. The Group applies these new standards when effective and endorsed by the European Union. The Group has not opted for early adoption for any of these standards. (i) Implication of New and Amended Standards and Interpretations The Group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 January 2017:  Amendments to IAS 7, “Statement of cash flows: Disclosure Initiative” The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Group has provided the information for both the current and the comparative period in Note 32.7;  Amendments to IAS 12, “Income Taxes: Recognition of deferred tax assets for unrealized losses” The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of deductible temporary difference related to unrealized losses. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. The application of these amendments had no effect on the Group’s financial position and performance, as the Group has no deductible temporary differences or assets Amendments to IFRS 12, “Disclosure of interests in other entities: Clarification of the scope of disclosure requirements in IFRS 12” The amendments clarify that the disclosure requirements in IFRS 12, other than those in paragraphs B10-B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal Group that is classified) as held for sale. These amendments did not affect the Consolidated Financial Statements, as the Group had no interests in other entities classified as held for sale. (ii) Future Implications of New and Amended Standards and Interpretations Not Yet Adopted Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2017 reporting periods. The Group’s assessment of the impact of these new that are in scope of the amendments;  Annual Improvement Cycle 2014-2016

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2017 REGISTRATION DOCUMENT