2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 119 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 4 3 the entity’s financial statements, as restated above, are translated at the closing rate, from the functional currency into the reporting currency of the consolidated financial statements. 1.5.2 Business combinations and goodwill Business combinations (revised IFRS 3) are recognized using the purchase method. This method implies the recognition at fair value of the identifiable assets (including intangible assets not previously recognized) and identifiable liabilities (including contingent liabilities, with the exception of future restructurings) of the companies acquired. The goodwill arising on a business combination is initially recognized at cost, which represents the excess of the acquisition cost over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. After the initial recognition, goodwill is measured at cost less accumulated impairment losses. For the purpose of impairment tests, the goodwill acquired in a business combination is, as of the acquisition date, allocated to each of the Group’s CGUs likely to benefit from the synergies of the business combination. Impairment tests are performed once there are indices of a loss of value and at least once a year. When subsidiaries are sold, the difference between the sale price and the net asset sold plus accumulated currency translation adjustments and the net value of the goodwill is recognized in the income statement. 1.5.3 Negative goodwill “Negative goodwill” represents the surplus between the Group’s interest in the fair value of the assets, liabilities and contingent liabilities acquired over the acquisition cost, on the acquisition date. It is booked directly as income/loss during the acquisition period. 1.5.4 Intangible assets Intangible assets acquired separately are initially reported at cost. The cost of an intangible asset acquired within a business combination is its fair value on the acquisition date. After the initial accounting, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. The Group assesses whether the useful life of an intangible asset is finite or indefinite. Intangible assets with a finite useful life are amortized over their economic useful life and are subject to an impairment test when there is an indication that the intangible asset is impaired. The amortization period and method for amortizing an intangible asset with a finite useful life are reviewed at least at the closing of each year. Any change in the expected useful life or the expected rate of consumption of the future economic benefits representing the asset is accounted for by modifying the amortization period or method, as applicable and such changes are treated as changes in estimates. The amortization expense for intangible assets with a finite useful life is booked on the income statement in the appropriate expense category depending on the function of the intangible asset. The amortization periods of the main intangible assets are: 3 software: 3 years; 3 leasehold rights, over the period of the concessions: 38 to 50 years. 1.5.5 Property, plant and equipment Property, plant and equipment are booked at cost after deducting accumulated depreciation and any accumulated impairment losses. The residual values, useful lives and depreciation methods are reviewed at each year-end and changed if necessary. Vessels A) Gross value Property, plant and equipment consist primarily of vessels valued on the date they are included in the Group’s assets at cost, i.e . the cost incurred to commission the asset for the projected use. The cost of a tangible asset consists of the purchase price paid to a third party (including customs duties and non recoverable taxes, but net of discounts and commercial rebates obtained from the supplier), plus the following acquisition costs: 3 directly attributable costs incurred to bring the asset into working order for the planned use; 3 installation costs; 3 mobilization costs to operating locations; 3 sea trial costs; 3 legal documentation costs; 3 professional fees (architects, engineers); 3 commissions; 3 costs for interim loans directly intended to finance the acquisition of the asset. A tangible asset may include several components with separate life cycles or rates of depreciation. In this case, the main elements of the asset are identified and recognized separately using the component- based approach. At BOURBON, each vessel consists of two components: 3 a vessel component; 3 an “overhaul” component, representing the cost of an overhaul. An overhaul consists of maintenance operations performed at regular intervals, based on a multi-year plan designed to meet classification requirements, international conventions or regulations.