NATIXIS -2020 Universal Registration Document

FINANCIAL DATA Consolidated financial statements and notes

Positive goodwill is recorded on a separate line on the asset side of the balance sheet if it relates to a controlled entity. It is allocated at the purchase date to one or more cash-generating units (CGUs) expected to benefit from the acquisition and is not amortized. It is tested for impairment at least once per year, and more often where there is objective evidence of impairment. The impairment test consists of comparing the carrying amount of the CGU or group of CGUs including goodwill with its recoverable value. A controlled entity’s negative goodwill is immediately recognized in income under “Change in value of goodwill”. Goodwill related to an associate or joint venture is included in the carrying amount of “Investments in associates” under assets if it is positive; however, it cannot subsequently be amortized. It is tested for impairment at least once a year. If it is negative, it is immediately recognized in income under “Share in income of associates”. Specific case of business combinations carried out under joint control Combinations of entities or operations under joint control are understood to be combinations in which several operations are combinedand all of the interestedparties (entities or operations) are ultimately controlledby the same party or parties for a relatively long period before and after the combination. Such combinations do not fall within the scope of IFRS 3R. Barring clarification of IFRS 3R on the accounting treatment of business combinationsunder joint control, Natixis applies a method based on historical carrying amounts to such transactions. According to this method, the difference between the price paid and Natixis’ share in the historical carrying amounts of the assets and liabilities of the acquired entity is recorded as a deduction from shareholders’equity. In effect, in using this method, any goodwill and valuationdifferences resulting from the applicationof the acquisition method are deducted from shareholders’ equity. The carrying amounts used are those listed in the consolidated financial statements of the ultimate parent company at the date of completion of the transaction. Transactions involving two entities controlled by Natixis and those involving an entity controlled by Natixis and an entity controlled by BPCE are considered to have been carried out by entities under joint control. Principles adopted for the measurement and recognition of the transactions resulting in the creation of Natixis in 2006 The assets contributed by the former CNCE to Natixis fall into two categories: shares in the Corporate & Investment Banking and service V subsidiaries; a portion of the cooperative investment certificates (CCIs) V conferring entitlement to the share capital of the Caisses d’Epargne. The contribution values used for consolidation purposes in respect of both categories of assets are the carrying amounts of these assets in the former CNCE’s consolidated financial statements, restated inaccordance with IFRS as adopted in the European Union. Other transactionsaffecting the structureof the Group that led to the creation of Natixis were accounted for by the acquisitionmethod for consolidation purposes, in accordance with IFRS 3.

2.5

Business combinations

and goodwill The following accounting treatment is applied to business combinations giving rise to control: IFRS 3 before revision if they occurred prior to January 1, 2010, V except for those that occurred before January 1, 2004. On the initial application date of IFRS, Natixis chose the option offered by IFRS 1 “First-Time Adoption of IFRS” to not retrospectively restate business combinationsmade prior to January 1, 2004, pursuant to IFRS 3; revised IFRS 3 (IFRS 3R) if they occur after January 1, 2010. V IFRS 3R can be applied prospectively to business combinations if their acquisitiondate is the same or later than the adoption date of IFRS 3R. In accordance with IFRS 3 (pre- or post-revision), business combinations are recorded using the acquisition method. Under the acquisition method, the identifiable assets and liabilities of the acquired entity are measured at their fair value at thevaluation date. The method used to measure non-controlling interests and goodwill may differ depending on whether IFRS 3 or IFRS 3R is applied. Application of IFRS 3 to business combinations carried out before V January 1, 2010: minority interests are determined based on their share in the V identifiable net assets of the acquired entity, measured at their fair value at the purchase date (partial goodwill method), goodwill is the difference between the cost of the business V combination and the share of the purchasing entity’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Application of IFRS 3R to business combinations carried out after V January 1, 2010: for each business combination, Natixis chose to determine V non-controlling interests either based on their share in the identifiable net assets of the V acquired entity, measured at their fair value at the purchase date, and therefore without recognizing goodwill on the non-controlling interests (partial goodwill method), or based on their fair value at the purchase date, resulting in V the recognition of goodwill, both for the Group share and the non-controlling interests (full goodwill method); hence, goodwill is a residual item determined as the difference V between (i) the sum of the purchase price, the fair value at the purchase date of the percentage interest held in the acquired entity prior to the purchase date, and the amount of the minority interests (determined using the partial goodwill method, in the majority of cases, or the full goodwill method) and (ii) the net amount of the assets and liabilities assumed, measured at their fair value at the purchase date.

5

267

www.natixis.com

NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020