BPCE_REGISTRATION_DOCUMENT_2017

5 FINANCIAL REPORT

IFRS Consolidated Financial Statements of BPCE SA group as at December 31, 2017

4.3

PROPERTY, PLANT AND EQUIPMENT

ASSETS HELD FOR SALE AND ASSOCIATED LIABILITIES Where a decision is made to sell non-currentassets and it is highly probable that the sale will occur within 12 months, these assets are shown separately on the balance sheet on the “Non-currentassets held for sale” line. Any liabilities associated with these assets are also shown separately on the balance sheet on the “Liabilities associated with non-current assets held for sale” line. Once classified in this category, non-current assets are no longer depreciated/amortizedand are measured at their lowest carrying amount or at fair value less sales costs. Financial instruments continue to be measured in accordance withIAS 39. 4.5 Provisions other than those relating to employee benefit commitments, provisions on regulated home savings products, off-balance sheet commitments, and insurance policies mainly consistof provisionsfor restructuring,claims and litigation,fines and penalties, and tax risks. Provisionsare liabilities of which the timing or amount is uncertain, but which can be reliably estimated. They correspond to current obligations (legal or implicit), resulting from a past event, and for which an outflow of resources will probably be necessary to settle them. The amount recognized in provisions is the best estimate of the expense required to extinguish the present commitment at the balance sheet date. Provisions are discounted when the impact of discounting is material. Changesin provisionsare recognizedin the incomestatementon the line items corresponding to the nature of future expenditure. Provisions on regulated home savings products Regulated home savings accounts ( comptes d’épargne logement – CEL) and regulated home savings plans ( plans d’épargnelogement – PEL) are retail products marketed in France governed by the 1965 law on home savings plans and accounts, and subsequent implementingdecrees. Regulated home savings products generate two types of commitments forthe Group: a commitmentto provide a loan to the customerin the future at a ● rate set on inceptionof the contract(for PEL products)or at a rate contingent upon the savings phase (forCEL products); a commitment to pay interest on the savings in the future at a ● rate set on inception of the contract for an indefinite period (for PEL products) or at a rate set on a half-yearly basis according to an indexing formula regulated by law (for CEL products). Commitments with potentially unfavorable consequences for the Group are measured for each generation of regulated home savings plans and for all regulated home savings accounts. A provision is recognized for the associated risks by discounting future potential earnings from at-risk outstandings: at-risk saving deposit outstandings correspond to the uncertain ● future level of savings for plans in existence at the date the provision is calculated. This is estimated on a statistical basis for each future period taking account of historical investor behavior patterns, and correspondsto the difference between the probable outstandings and the minimum expected outstandings; 4.4 PROVISIONS

AND INTANGIBLE ASSETS This item includes property owned and used in the business, equipmentacquired under operating leases, property acquired under finance leases and assets temporarily unlet held under finance leases. Interests in non-trading real estate companies (SCIs) are accounted for as property, plant and equipment. In accordance with IAS 16 and IAS 38, property, plant and equipmentand intangibleassets are recognizedas assets only if they meet the followingconditions: it is probable that the company will enjoy future economic ● benefits associated with the asset; the cost of the asset can be measured reliably. ● Property, plant and equipment and intangible assets used in operations are initially recognized at cost plus any directly attributable acquisition costs. Software developed internally that fulfills the criteria for recognition as a non-current asset is recognized at its production cost, which includes external charges and the payrollcosts of employeesdirectly assignedto the project. The component-basedapproach isappliedto all buildings. After initial recognition, property, plant and equipment and intangible assets are measured at cost less any accumulated depreciation,amortizationor impairment.The depreciableamountof the asset takes account of its residual value where this is material and can be measuredreliably. Property, plant and equipmentand intangibleassets are depreciated or amortized in order to reflect the pattern in which the asset’s future economicbenefitsare expectedto be consumedby the entity, which generallycorrespondsto the asset’s useful life. Where an asset consists of a number of components that have different uses or economicbenefit patterns, each componentis recognizedseparately and depreciated over a period that reflects the useful life of that component. The depreciationand amortizationperiods used by the Group are as follows: buildings: 20to 60 years; ● internal fixtures and fittings: 5 to 20 years; ● furniture and special equipment: 4 to 10 years; ● Other items of property, plant and equipment are depreciated over their estimated useful life, which generally ranges from five to ten years. Property, plant and equipment and intangible assets are tested for impairment whenever there is any evidence that they may be impaired at the balance sheet date. If this is the case, the revised recoverableamount of the asset is comparedto its carrying amount. If the revised recoverable amount of the asset is lower than its carrying amount, an impairment loss is recognizedin income. This loss is reversed in the event of a change in the estimated recoverable amount or if there is no longer any evidence of impairment. The accountingtreatmentadoptedfor property,plant and equipment and intangible assets used in operations and financed using lease financingagreementsis described inNote 4.9. Equipment leased under operating leases (group as lessor) is recognized as an asset on the balance sheet under property, plant and equipment. computer equipment:3 to 5 years; ● software: not more than5 years. ●

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Registration document 2017