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. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (IFRS 5) A non-current asset (or a group of assets to be disposed of) is considered to be held for sale if its book value is recovered principally through a sale rather than through continued use. For this to be the case, the asset (or group of assets to be disposed of) must be available for immediate sale in its current condition, and its sale must be highly probable. The relevant assets and liabilities are shown separately on the balance sheet under “Non-current assets held for sale and discontinued operations” and “Liabilities associated with non-current assets held for sale and discontinued operations”. These non-current assets (or group of assets to be disposed of) classified as held for sale are measured at the lower of their book value and their fair value less costs to sell. In the case of unrealised losses, impairment is recognised in the Income Statement. Furthermore, non-current assets representing depreciable fixed assets cease to be depreciated from the date of their derecognition. For equity-accounted investments, the share of profit or loss corresponding to the percentage held for sale is no longer recognised. If the fair value of the group of assets held for sale less selling costs is lower than its book value after impairment of the non-current assets, the difference is allocated to other assets from the group of assets held for sale including financial assets. A discontinued operation is any component that the Group has either disposed of, or that is classified as held-for-sale, in one of the following situations: - It represents a separate, major line of business or geographical area of operations. - it is part of a single coordinated plan to dispose of a separate, major line of business or geographical area of operations; or - it is a subsidiary acquired exclusively with a view to resale. The following are shown on a separate line of the Income Statement: - net income after tax from discontinued operations - the profit or loss after tax arising from the disposal or measurement at fair value less selling costs for the assets and liabilities that constitute the discontinued operations. 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 scope of consolidation. CONCEPTS OF CONTROL Under IFRS, all entities that are controlled, jointly controlled or significantly influenced are consolidated, provided that they do not fall within the scope of the exclusions described below. Control over an entity is presumed to exist when CFM Indosuez Wealth is exposed to, or entitled to, variable returns from its involvement with the entity and its power over the entity enables it to influence those returns. Power in this context means substantive rights (voting or contractual). Rights are deemed substantive if the holder of the rights can, in practice, exercise them when decisions are being taken about the entity’s relevant activities. CFM Indosuez Wealth is deemed to control a subsidiary governed by voting rights when its voting rights give it the actual ability to direct the subsidiary’s relevant activities. CFM Indosuez Wealth generally controls a subsidiary when it holds more than half the existing or potential voting rights in an entity, whether directly or indirectly through subsidiaries, except when it can be clearly demonstrated that holding such rights does not give it the power to direct the entity’s relevant activities. Control is also deemed to exist where CFM Indosuez Wealth holds half or less than half the voting rights, including potential rights in an entity but is, in practice, able to direct the entity’s relevant activities at its sole discretion, notably because of the existence of contractual agreements, the relative size of its stake in the voting rights compared with the stakes held by other investors, or for other reasons or in other circumstances. Control of a structured entity is not only assessed on the basis of the percentage of voting rights which, by nature, have no effect on the entity’s returns. Analysis of control takes into account not only the contractual arrangements and risks of CFM Indosuez Wealth, but also the involvement and decisions of CFM Indosuez Wealth in setting up the entity, rights under agreements that give the investor the power to direct the relevant activities only when particular circumstances arise, and other facts or circumstances that indicate that the investor has the ability to direct the relevant activities of the entity. CFM Indosuez Wealth Management 96
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