Areva - Reference Document 2016

20.2 Notes to the consolidated financial statements for the year ended December 31, 2016

FINANCIAL INFORMATION CONCERNING ASSETS,

FINANCIAL POSITION AND FINANCIAL PERFORMANCE

out an analysis of the issues and potential impacts which Phase 1 “Classification

andMeasurement” and Phase 2 “Impairment” of this new standard could have on

assets earmarked for end-of-lifecycle operations. In fact, according to IFRS 9, the

classification and measurement of financial assets will depend on the business

model and contractual characteristics of the instruments. During their initial

recognition, the financial assets will be classified at amortized cost in fair value

through equity or in fair value through profit and loss. The application of these

two criteria could lead to a different classification and measurement of assets

earmarked for end-of-lifecycle operations than in IAS 39. In addition, Phase 2

of the standard, “Impairment”, introduces a new impairment model for credit

risk based on expected losses. This model will require recognition of 12-month

expected credit losses on purchased or originated instruments (resulting from the

risk of defaults in the next 12months) at their initiation. Full lifetime expected credit

losses (resulting from the risk of defaults over the remaining life of the instrument)

will have to be recognized if the credit risk has increased significantly since initial

recognition. The group is analyzing the potential impacts that application of

this model would bring to its portfolio of earmarked assets. At this stage of the

analysis, the principal impacts expected are an increase in the volatility of the

statement of income, unless the group changes the terms for management of its

earmarked funds. However, optimization of the yields of assets in the earmarked

funds will remain the group’s priority, independently of the volatility that their

recognition will bring about in the financial statements.

IFRS 15 “Revenue from Contracts with Customers” was published on May 28,

2014 and adopted by the European Union on September 22, 2016. The

mandatory effective date is January 1, 2018. It will replace several standards and

interpretations related to recognition of revenue, in particular IAS 18 “Revenue

Recognition” and IAS 11 “Construction Contracts”. This standard rests on

principles described in a five-stepmodel to determine when and in what amount

income from ordinary operating activities should be recognized. The group has

spent considerable effort on the training of its financial and operating teams to

raise their awareness of the changes that the new standard could bring. The

different types of contracts and identification of the issues that the standard

might bring are being analyzed.

New standards and interpretations not yet adopted

by the European Union

IFRS 16 “Leases”;

IFRS 15 “Revenue from Contracts with Customers” - Clarifications;

Amendment to IAS 12 “Income Taxes”: recognition of deferred tax assets for

unrealized losses on debt instruments measured at fair value;

Amendment to IAS 7 “Statement of Cash Flows”: reconciliation of net debt

between opening and closing;

Amendment to IFRS 4 “Insurance Contracts”;

Amendment to IFRS 2 “Share-based Payment”: clarification on themeasurement

and in the event of modification of a cash-settled or equity-settled plan.

1.3.1. Presentation of the financial statements

1.3.1.1. Operations sold, discontinued and held for sale

Operations sold, discontinued and held for sale are presented in the financial

statements in accordance with IFRS 5. Operations held for sale correspond to

distinct, principal operating segments within the group for which management

has initiated a disposal plan expected to lead to a loss of control and an active

program to search for buyers, and whose sale is deemed highly probable within

the 12 months following the end of the financial year (which may be extended in

the event of particular circumstances).

Discontinued operations correspond to operating segments whose operation was

terminated at the date of closing of the financial year.

The planned restructuring operations described in note 1.1 will have the effect of a

loss of control of New NP, NewCo and other operations held for sale (in particular

AREVA TA and renewable energies). The group believed that the conditions for

classification as operations held for sale had been met, which had the following

consequences, pursuant to the provisions of IFRS 5:

VALUATION

Before proceeding to classification as “operations held for sale”, all of the

assets and liabilities concerned were valued in accordance with the accounting

principles historically applied by AREVA, described in note 1.3.

As from their date of classification as “operations held for sale”:

○

non-current assets such as goodwill, intangible assets, property, plant and

equipment, and interests in joint ventures and associates follow specific rules

imposed by IFRS 5. In particular:

amortization of amortizable assets ceases,

interests in joint ventures and associates cease to be consolidated by the

equity method;

○

the other assets and liabilities continue to be valued according to the principles

described in note 1.3.

Thus determined, the group’s carrying amount of assets held for sale and related

liabilities is compared with its fair value less disposal costs, giving rise if necessary

to the recognition of impairment.

PRESENTATION

The assets and liabilities of operations held for sale are presented in their total

amount under specific headings of the statement of financial position. The

payables and debt of these operations towards the group’s other entities continue

to be eliminated on consolidation. The comparative statement of financial position

is not restated.

Net income from operations sold, discontinued and held for sale is presented

under a specific heading of the statement of income, which includes the net

income after tax of those operations until the date of their termination or disposal

and the net gain after tax on the disposal itself. The statement of income from the

previous year is presented for purposes of comparison and restated in identical

fashion. This heading also includes the impact on the statement of income

of post-disposal price adjustments and warranties granted to the buyer. The

elimination of the income and expenses of these operations with respect to the

group’s other entities aims to present the revenue earned with companies outside

the group and reflects the manner in which the transactions will be continued.

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2016 AREVA

REFERENCE DOCUMENT