EURAZEO_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS Statutory Auditors' report on the consolidated financial statements 4 Accounting for major acquisitions during the fiscal year and purchase price allocation – See Note 2 "Consolidation Scope", Note 6.1 "Goodwill", Note 13.4 "Net cash flow from investing activities", Note 14.3 "Off-balance sheet commitments" and Note 16.1 "Consolidation methods" to the financial statements

Description of risk

How our audit addressed this risk

During 2017, the Group made new investments for a total disbursement of €2,135 million. The main acquisitions were CPK, Trader Interactive, Iberchem, and WorldStrides. At December 31, 2017, these acquisitions resulted in the recognition of goodwill of €234 million (Iberchem) and of €1,101 million (WorldStrides) before the purchase price allocation, which will be finalized in the twelve months following the effective takeover dates. As part of these operations, a number of commitments were made or received by Eurazeo including purchase commitments, vendor warranties and shareholder agreements. Based on the analysis conducted by management of the type of investment, control, representation on governance boards and percentage share held by Eurazeo, investments are consolidated fully, according to the equity method or classified as financial assets. This analysis requires a certain amount of judgment to: determine the consolidation method to be used in accordance • with current accounting standards; determine the acquisition price, particularly if earn-out clauses • exist; identify the assets acquired and liabilities assumed, measure their • fair value and allocate a purchase price to them. Accounting for these acquisitions may be complex and material to the consolidated financial statements. Accordingly, we deemed accounting for major acquisitions during the financial year to be a key audit matter.

Based on this information, our work consisted primarily in: examining the major acquisition agreements entered into by the • Group during the fiscal year and, where relevant, other agreements signed as part of these operations, particularly shareholders agreements and management packages, in order to: ensure the consolidation method used complied with current • accounting standards, verify the list of off-balance sheet commitments disclosed in • Note 14.3 (Off-balance sheet commitments) to the consolidated financial statements, examine the cost price calculation performed by management • in relation to the acquisition price and earn-out clauses; assessing, with the support of our evaluation experts, the • appropriateness of the purchase price allocation and the measurement of the intangible assets identified for the recent acquisitions made: assess the appropriateness of the main assumptions made by • management to identify the assets acquired and the liabilities assumed and to measure their fair value, examine the reports compiled by independent firms at the • request of management to identify any assets that are over-valued or liabilities that are under-valued or not taken into account in the identification of assets acquired and liabilities assumed, perform a comparative analysis of the main assumptions used • with reference to similar recent transactions and sensitivity analyses; assessing the appropriateness of the disclosures provided in the • notes to the consolidated financial statements, particularly Note 2 and Note 6.1.

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2017 Registration document

Eurazeo