BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

OPERATING LEASE ARRANGEMENTS NOTE 29

Accounting policies Leases are classified as finance-leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. a) The Group as lessor Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expenses on a straight-line basis over the lease term. The Group is only involved as lessor in operating leases on land and buildings disclosed in the balance sheet as investment properties. b) The Group as lessee Assets held under finance-leases are recognized as assets of the Group at their fair value at inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance-lease obligation. Lease payments are broken down between financial expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the income statement. Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

The BIC Group as lessee 29-1

Dec. 31, 2016

Dec. 31, 2017

(in thousand euros)

Rentals under operating leases recognized as an expense in the year

10,843

9,234

At the balance sheet date, the BIC Group has outstanding commitments under non-cancellable operating leases, which fall due as follows:

Dec. 31, 2016

Dec. 31, 2017

(in thousand euros)

Within one year

9,637

9,147

In the second to fifth years inclusive

19,495

19,356

Beyond five years

2,506

4,619

TOTAL

31,638

33,122

Operating lease rentals are primarily linked to office properties.

The BIC Group as lessor 29-2 The activity of the BIC Group as lessor is not significant.

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BIC GROUP - 2017 REGISTRATION DOCUMENT