The cost of leases is broken down into interest and amortised capital. The right-of-use of the asset is valued at the initial value of the lease liability plus the initial direct costs, advance payments and restoration costs, minus any lease incentive benefits. It is amortised over the estimated term of the lease. The lease liability and the right of use may be adjusted in the event of any amendment to the lease, re-estimation of the lease term or rent review related to the application of indices or rates. Deferred taxes are recognised as temporary differences in right-of-use and rental liabilities by the lessee. In accordance with the exception provided for by the standard, short-term leases (initial term of less than twelve months) and leases for which the replacement value of the leased asset is low are not recognised on the balance sheet. The corresponding leasing expenses are recorded on a straight-line basis in the Income Statement under “operating expenses” In accordance with the provisions of the standard, the Group does not apply IFRS 16 to leases of intangible assets. 1.3 CONSOLIDATION PRINCIPLES AND METHODS (IFRS 10, IFRS 11 AND IAS 28) SCOPE OF CONSOLIDATION The consolidated financial statements include the accounts of CFM Indosuez Wealth and those of all the companies over which, according to the provisions of IFRS 10, IFRS 11 and IAS 28, CFM Indosuez Wealth has the power to control, joint control or significant influence, with the exception of those that are not significant in relation to all the companies included in the consolidation scope. DEFINITION OF CONTROL In accordance with international accounting standards, all the entities listed above are under the exclusive control of CFM Indosuez Wealth and are therefore fully consolidated. All consolidated companies have their accounts kept in EUR. CONSOLIDATION METHODS Consolidation methods are set out in IFRS 10, IFRS 11 and IAS 28 respectively. They are based on the nature of the control exercised by CFM Indosuez Wealth over entities within the scope of consolidation, regardless of their activity and whether or not they have legal status: - full consolidation for controlled entities, including entities with different account structures, even if their activity is not in line with that of CFM Indosuez Wealth; - the equity method, for entities over which significant influence is exercised and jointlyowned businesses (excluding joint ventures). Full consolidation consists of substituting the value of the securities with each of the assets and liabilities of each subsidiary. The equity and income attributable to non-controlling interests is presented separately in the consolidated balance sheet and Income Statement. Non-controlling interests are as defined by IFRS 10 and include instruments representing current ownership interests that grant entitlement to a proportional share of the net assets in the event of liquidation and the other equity instruments issued by the subsidiary and not held by the Group. Investments in associated or jointly controlled companies are recognised as a separate item in the balance sheet under "Investments in companies accounted for using the equity method". The equity method consists of replacing the value of the securities with the Group's share of equity and the profit or loss of the companies concerned. As the two consolidated subsidiaries were created by CFM Indosuez Wealth, no goodwill has been recognised. RESTATEMENTS AND ELIMINATIONS In accordance with IFRS 10, CFM Indosuez Wealth makes the restatements necessary to harmonise the valuation methods of consolidated companies. The impact on the consolidated balance sheet and income statement of internal Group operations is eliminated for fully consolidated entities. Capital gains or losses from asset sales between consolidated companies are eliminated; any impairments recorded on an internal transfer are recognised. CFM Indosuez Wealth Management 84
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