TREATMENT OF NON-CURRENT ASSETS (IAS 16, 36, 38 AND 40) The Crédit Agricole group applies component accounting for all its property, plant and equipment. In accordance with the provisions of IAS 16, the depreciable amount takes account of the potential residual value of property, plant and equipment. Land is measured at cost of acquisition, less any impairment losses. Property used in operations, investment property and equipment are recognised at cost of acquisition less accumulated depreciation and impairment losses since being commissioned. Purchased software is recognised at cost of acquisition less accumulated depreciation and impairment losses since acquisition. Proprietary software is recognised at cost of production less accumulated depreciation and impairment losses since completion. Apart from software, intangible assets are mainly assets acquired in a business combination resulting from contractual rights (e.g. a distribution agreement). These are valued on the basis of the corresponding future economic benefits or expected service potential. Fixed assets are depreciated over their estimated useful lives. The Crédit Agricole Group accounts for property, plant and equipment assets by component. The components and depreciation periods are adapted to the nature of the construction and the location and are defined as follows: Component Amortisation period Land Non depreciable Structural works 30 to 80 years Non-structural works 8 to 40 years Technical installations 5 to 25 years Fixtures 5 to 15 years IT equipment 4 to 7 years Specialised equipment 4 to 5 years By way of example, the following useful lives are generally used for the various types of intangible asset: Asset category Depreciation period Patents, licences 5 years Software 3 to 5 years FOREIGN CURRENCY TRANSACTIONS (IAS 21) On the reporting date, assets and liabilities denominated in foreign currencies are translated into euros, the Crédit Agricole Group’s operating currency. In accordance with IAS 21, a distinction is made between monetary items (e.g. debt instruments) and non-monetary items (e.g. equity instruments). Foreign-currency denominated monetary assets and liabilities are translated at the closing rate. Exchange rate differences arising from this conversion are recognised in the profit or loss account. This rule has three exceptions: - For debt instruments measured at fair value through other comprehensive income, the translation difference calculated on the amortised cost is recognised in income; the balance is recorded in other comprehensive income recyclable to income. - For elements designated as cash flow hedges or forming part of a net investment in a foreign entity, translation adjustments on the effective part are recognised in other comprehensive income that may be reclassified. - For financial liabilities designated at fair value through profit or loss, translation adjustments related to changes in the fair value of own credit risk are recorded in other comprehensive income (items than may not be reclassified). The accounting treatment of non-monetary items differs according to the accounting treatment applied before their conversion: - Items recorded at historical cost continue to be valued at the exchange rate on the day of the transaction (historical rate); - Fair value items are converted at the exchange at the reporting date. Foreign exchange differences on non-monetary items are recognised: - In the income statement, if the gain or loss on the non-monetary item is recorded in the income statement; - In other comprehensive income not recyclable to income if the gain or loss on the non-monetary item is recorded in other comprehensive income not recyclable to income. REVENUE FROM CONTRACTS WITH CUSTOMERS (IFRS 15) Fee and commission income and expenses are recognised in income based on the nature of the services to which they relate. Fees and commission that form an integral part of the yield on a financial instrument are recognised as an adjustment to the yield on that instrument and included in its effective interest rate (pursuant to IFRS 9). For other types of commissions, their recognition in the income statement must reflect the rate at which control over the good or service sold is transferred to the client: The result of a transaction associated with the provision of services is recognised under “Commissions” when transferring control of the service to the client if it can be reliably estimated. This transfer may occur as the service is provided (ongoing service) or on a specific date (one-off service). CFM Indosuez Wealth Management 94
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