EURAZEO_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements

ACCOUNTING PRINCIPLES AND METHODS NOTE 16

Consolidation method 16.1 Fully-consolidated companies

Foreign-currency denominated inter-company advances Foreign exchange gains and losses arising on foreign-currency denominated inter-company advances, the settlement of which is neither planned nor probable in the foreseeable future, are recognized in Foreign currency translation reserves. These foreign exchange gains and losses are not released to profit or loss on repayment, unless repayment forms part of a partial sale of the entity (i.e. leading to a decrease in the percentage interest in the subsidiary). Assets (or groups of assets) and 16.3 liabilities classified as held for sale The Eurazeo group’s main activity is the purchase and sale of investments which may, at the closing date of the consolidated financial statements, constitute assets (or groups of assets) held for sale. Non-current assets (or groups of assets) are classified as held for sale and stated at the lower of carrying amount and fair value less costs to sell, if the carrying amount is recovered principally by means of a sale transaction rather than through continuous use. For this to be the case, an asset (or a group of assets) must be available for immediate sale in its current state, subject only to terms that are usual and customary for sales of such assets, and its sale must be deemed highly probable. In the case of financial instruments or investment property classified as held for sale, applicable measurement rules are set out in IFRS 9 and IAS 40, respectively. These assets are stated at fair value. Pursuant to IFRS 5, Non-current Assets held for Sale and Discontinued Operations, all liabilities (excluding equity), associated with groups of assets classified as held for sale are presented in a separate line of the Statement of Financial Position. Only purchased trademarks, which are identifiable, widely known and with a fair value that can be reliably measured are recognized as assets, at the value attributed to them on acquisition. Whether a trademark has a finite or indefinite useful life is determined based, in particular, on the following factors: overall position of the trademark in the sector, as measured by • sales volume, international scope and renown; outlook for the long-term return; • exposure to fluctuations in the economy; • major developments in the sector liable to have an impact on the • trademark’s future; age of the trademark. • Trademarks with a finite useful life are amortized over their useful life and, where appropriate, are subject to impairment tests where there is indication that their value may have been impaired. Trademarks with indefinite useful lives are not amortized but are subject to impairment tests on an annual basis or whenever there is indication that their value may have been impaired. Costs incurred to create a new trademark or to develop an existing one are expensed in the period incurred. Other intangible assets Intangible assets (excluding trademarks) are measured at acquisition cost less accumulated amortization and impairment. Intangible assets 16.4 Trademarks

Companies over which the Group holds a controlling interest, usually as a result of a majority stake, are fully consolidated. This rule applies regardless of the actual percentage of shares held. The concept of control represents the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Minority interests in subsidiaries are shown in the balance sheet in a separate equity category. Net income attributable to minority shareholders is clearly shown in the income statement. The income and expenses of subsidiaries purchased or disposed of during the fiscal year are included in the income statement from the acquisition date or up to the disposal date accordingly. Equity-accounted associates Companies in which the Group exercises significant influence on financial and business decisions but does not have majority control, or in which it exercises joint control are accounted for in accordance with the equity method. Business combinations Business combinations are accounted for using the acquisition method. Accordingly, when an entity is consolidated for the first time, its assets, liabilities and contingent liabilities are measured at fair value. In addition, for each business combination, the Group values any non-controlling interests in the entity acquired at fair value or based on the Group’s proportional interest in the identifiable net assets of the entity acquired. Acquisition costs are expensed in the income statement. At the acquisition date, the Group recognizes goodwill in the amount of the difference between the consideration transferred plus any non-controlling interests in the entity acquired and the identifiable assets transferred net of liabilities assumed. Where an acquisition leading to the acquisition of control is performed in stages, the Group revalues the previously held investment at fair value at the acquisition date and recognizes any resulting gain or loss in net income. Transactions by Group entities in foreign currencies are translated into the functional currency at the spot exchange rate at the date of the transaction. The foreign-currency value of assets and liabilities is translated at the spot exchange rate prevailing on the last day of the period. The foreign exchange gains and losses resulting from the translation of foreign-currency transactions are recognized in the income statement. Translation of foreign-currency denominated financial statements The financial statements of companies presented in foreign currencies are translated as follows on consolidation: assets and liabilities are translated at the closing exchange rate; • income statement items are translated at the average exchange • rate for the period. Unrealized foreign exchange gains and losses are reported on a separate line in equity under “Foreign currency translation reserves”. Foreign currency translation 16.2 Foreign-currency denominated transactions

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2017 Registration document