EURONEXT_Registration_Document_2017

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

simplified approach by using a provision matrix for determining the impairment provision. The Group determined that, based on the assessment undertaken to date and due to the secure nature of its trade receivables, a possible increase of the loss allowance is not expected to be material (approximately €0.2 million). Hedge Accounting The new hedge accounting rules will have no impact as the Group doesn’t apply hedge accounting. Derivative instruments Derivative instruments continue to be recorded at fair value through profit or loss and carried as assets when their fair value is positive, and as liabilities when their fair value is negative. Embedded derivative instruments are no longer separated and the financial assets are classified as a whole based on the business model and SPPI assessments. In summary, as at reporting date the adoption of IFRS 9 is expected to negatively impact total assets and equity by €0.2 million. The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extent of the Group’s disclosures about its financial instruments particularly in the year of adoption of the new standard. IFRS 15, “Revenue from Contracts with Customers” IFRS 15 will replace IAS 18 which covers contracts for goods and services and IAS 11 which covers construction contracts. The new standard is based on the principle that revenue is recognised when control transfers to a customer. The Group plans to adopt the new standard on the required effective date of 1 January 2018 using the modified retrospective approach, which means that the cumulative impact of the adoption will be recognised in retained earnings as of 1 January 2018 and that comparatives will not be restated. During 2016, the Group performed a preliminary assessment of IFRS 15, which was continued with a more detailed analyses in 2017. In preparing to adopt IFRS 15, the Group’s main considerations are the following: Revenues – Trading and Post-trade For contracts with customers in which the service provided to exchange securities is generally expected to be the only performance obligation, adoption of IFRS 15 is not expected to have any impact on the Group’s revenue and profit or loss. The Group expects the revenue recognition to occur at a point in time when control of the asset is transferred to the customer, generally on execution of the trade. Revenues – Listing For contracts with customers containing listing services, the Group is still assessing the expected impact of IFRS 15 and in particular on determining performance obligations and the related timing of listing revenue recognition. The Group will finalise its assessment of the impact of the new standard on their listing revenues before adoption of the impact in both the interim and annual 2018 Financial Statements.

standards and interpretations is set out below. These standards have not been applied in preparing these Consolidated Financial Statements. The quantitative information disclosed in this note may be subject to further changes in 2018. IFRS 9, “Financial instruments” IFRS 9 replaces the guidance from International Accounting Standard (“IAS”) 39. The new standard addresses the classification, measurement and de-recognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The Group plans to adopt the new standard on the required effected date of 1 January 2018 and will not restate comparative information. During 2017, the Group has assessed the impact of IFRS 9 on its financial assets and liabilities. This assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the Group in 2018. Overall, the Group expects no significant impact on its Consolidated Financial Statements. Classification and Measurement The Group’s financial assets currently held as available-for-sale (“AFS”), consist of unlisted equity securities held for long-term strategic purposes. No impairment losses were recognised in profit or loss during prior periods for these instruments. The Group opts to apply the available election for classification as fair value through other comprehensive income (“FVOCI”) for these instruments under IFRS 9. Accordingly, the Group does not expect the new guidance to significantly affect the classification and measurements of these financial assets. However, gains and losses realised on the sale of financial assets at FVOCI will no longer be transferred to profit or loss on sale, but instead reclassified below the line from FVOCI reserve to retained earnings. During the 2017 financial year, €40.6 million of such gains were recognised in profit or loss in relation to the disposal of available-for-sale financial assets. The AFS reserve of €37.6 million related to these financial assets, which is currently presented as accumulated OCI, will be reclassified to retained earnings on transition to the new standard. Trade receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analysed the contractual cash flow characteristics of these instruments and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification of these instruments is not required. On the classification and measurement of financial liabilities under IFRS 9, the Group’s assessment did not indicate any significant impact. Impairment IFRS 9 requires the recognition of impairment provisions based on expected credit losses (“ECL”) rather than only incurred credit losses as it is the case under the current standard. The new standard requires the Group to record lifetime expected credit losses on all of its trade receivables, for which the Group will apply the

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2017 REGISTRATION DOCUMENT