AFD - 2018 Registration document

CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS ACCOUNTING PRINCIPLES ADOPTED BY THE EUROPEAN UNION 6 Notes to the consolidated financial statements

The Group does not expect the application of IFRS 16 to have any material impact on its equity. The Group has chosen to use the two accounting exemptions proposed by the standard for the following contracts: P leases for which the underlying asset is of low value. 6.2.3 Principles for the preparation of the consolidated financial statements of AFD Group at 31 December 2018 6.2.3.1 Consolidation scope and methods 6.2.3.1.1 Consolidation scope AFD’s consolidated financial statements cover all fully- controlled enterprises, joint ventures and companies on which the Institution exerts a significant influence. The following are not included in the consolidation scope: P foreign companies in which AFD holds a minority interest and does not exercise significant influence due to the companies being either fully or partially state-owned. P Consolidation standards IFRS 10-11-12: Significant judgements and assumptions used in determining the scope of consolidation: The elements used to draw a conclusion on whether AFD exercises control or influence over the entities in which it invests are many. Accordingly, the Group determines its ability to exercise influence over the management of another entity by taking due consideration of the entity’s structure, shareholders, arrangements and the participation of AFD and its subsidiaries in decision-making bodies. Moreover, materiality with regard to Group accounts is also subject to analysis. The list of companies in which AFD directly or indirectly holds an equity interest that exceeds 20% of the company’s share capital is presented on the following page. P short-term leases; P companies of no real significance;

It brings together in a single text the principles for recognising revenue from the sale of long-term contracts, sales of goods and also services which do not fall within the scope of the standards for financial instruments (IAS 39/IFRS 9), insurance policies (IFRS 4/IFRS 39) and leases (IAS 17/IFRS 9). (IAS 17/IFRS 16). It introduced new concepts which could change the way some items of net banking income are recognised. For the initial application of IFRS 15, AFD Group opted for the modified retrospective method without comparison with the 2017 financial year. The application of IFRS 15 had no material impact on income or shareholders’ equity. IFRS 16 Leases IFRS 16 Leases will replace IAS 17 and all the associated interpretations (IFRIC 4, Determining whether an Arrangement contains a Lease, SIC 15, Operating Leases – Incentives and SIC 27, Evaluating the Substance of Transactions in the Legal Form of a Lease). It will apply to all annual periods starting 1 January 2019. The main change introduced by IFRS 16 relates to lessee accounting. IFRS 16 will require lessees to adopt a model which accounts for all leases in their balance sheet, recognising in liabilities all commitments for the full duration of the agreement and, in assets, a usage right to be amortised. In 2017, AFD Group began a survey of its real estate assets and IT hardware contracts, which constitute the majority of the Group’s leases. The Group has finalised the choice of structuring options for the interpretation of the standard. It has also collated the information necessary to enable the processing of data for all of the Group’s leases. It will quantify the impact in the first quarter of 2019 on the basis of the financial statements at 31 December 2018. The Group will apply the simplified retrospective method by recognising the cumulative effect of the initial application at the transition date (1 January 2019).

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REGISTRATION DOCUMENT 2018