OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES In accordance with IAS 32, CFM Indosuez Wealth offsets a financial asset and a financial liability and presents a net balance if and only if it has a legally enforceable right to offset the amounts recognised and intends to settle the net amount or realise the asset and realise the liability simultaneously. The derivative instruments and repurchase operations handled with clearing houses whose operating principles meet both the criteria required by IAS 32 are offset on the balance sheet. NET GAINS OR LOSSES ON FINANCIAL INSTRUMENTS Net gains (losses) on financial instruments at fair value through profit or loss For financial assets recognised at fair value through profit or loss, this item includes the following items of income: - Dividends and other income from equities and other variable income securities classified as financial assets at fair value through profit or loss; - Changes in the fair value of financial assets or financial liabilities measured at fair value through profit or loss; - Capital gains and losses realised on financial assets at fair value through profit or loss; - Changes in fair value and income from the sale or termination of derivative instruments that are not subject to a fair value hedging or cash flow hedging relationship. This item also includes the ineffective portion of hedging transactions. Net gains (losses) on financial instruments at fair value through other comprehensive income For financial assets recognised at fair value through other comprehensive income, this item includes the following items of income: - Dividends from equity instruments classified as financial assets at fair value through other comprehensive income not recyclable to income: - Capital gains and losses and income related to the termination of the hedging relationship on debt instruments classified as financial assets at fair value through recyclable equity; - Income from the sale or termination of fair value hedges of financial assets at fair value through other comprehensive income when the hedged item is sold. FINANCING AND FINANCIAL GUARANTEE COMMITMENTS GIVEN Financing commitments that are not classified as assets measured at fair value through profit or loss or that are not considered to be derivative instruments within the meaning of IFRS 9 are not included in the balance sheet. However, they are subject to provisions for credit risk in accordance with IFRS 9. A financial guarantee contract is a contract requiring the issuer to make specific payments to reimburse the holder for a loss incurred due to a specific debtor's failure to make a payment when due, in accordance with the initial or modified terms and conditions of a debt instrument. Financial guarantee contracts are initially measured at fair value and subsequently at the one of the following, whichever is greater: - The value adjustment amount for losses determined in accordance with the provisions of the “Impairment” section of IFRS 9; or - The amount initially recognised less, if any, accumulated income recognised in accordance with the principles of IFRS 15 revenue from contracts with clients. EMPLOYEE BENEFITS (IAS 19) Employee benefits, in accordance with IAS 19, fall into four categories: - Short-term benefits, such as wages, social security contributions, holidays, incentive bonuses, profit-sharing, and bonuses, are those expected to be paid within 12 months of the year in which the services were rendered; - Retirement benefits, which are themselves classified into the two categories described below: defined benefit plans and defined contribution plans. - Other long-term benefits (long-service awards, bonuses and remuneration payable 12 months or more after the end of the financial period); - Severance pay. POST-EMPLOYMENT BENEFITS Defined-benefit plans At each closing date, CFM Indosuez Wealth determines its retirement and similar benefits as well as all the employee benefits granted in respect of defined benefit plans. In accordance with IAS 19, these commitments are assessed based on a set of actuarial, financial and demographic assumptions, using the Projected Unit Credit method. Under this method, for each year of service by an employee, a cost is allocated corresponding to the rights accrued over the period. This cost is calculated based on the discounted future benefit. Annual Report 2023 79
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