CFM INDOSUEZ Wealth Management - 2020 Annual Report

It involves identifying and analysing the impact of the reform.Unecartographierecense,notamment, l’ensemble des expositions et contrats permettant d'estimer l'exposition consolidée du groupe Crédit Agricole à la réforme. The main indices to which the Group is exposed are: • EONIA • Critical benchmarks identified in the BMR: Euribor, Libor USD, Libor GBP, Libor JPY, Libor CHF, Libor EUR, Wibor, Stibor + Hibor In light of thedetails available todate, for Eoniacontracts, the transition period should end on 3 January 2022. For the other indices, ongoingwork does not currently allow an end date to be estimated. As of 31 December 2020, this mapping shows a nominal amount of hedging instruments affected by the reform of €1,441 million. 1.2 ACCOUNTING PRINCIPLES AND POLICIES USE OF JUDGEMENT AND ESTIMATES IN THE PREPARATION OF THE FINANCIAL STATEMENTS By their nature, the assessments required to prepare the financial statements require the formulation of assumptions and involve risks and uncertainties as to their realisation in the future. Future realisations can be influenced by many factors, including: • national and international market activities; • fluctuations in interest rates and foreign exchange rates; • economic and political conditions in certain business sectors or countries; • changes in regulations or legislation. These are just a few examples. Accounting estimates which require assumptions to be made are mainly used for the following measurements: • financial instruments measured at fair value; • pension plans and other future benefits; • impairment of debt instruments at amortised cost at fair value through other comprehensive income recyclable to income; • provisions; • deferred tax assets. The procedures for using judgement or estimates are described in the relevant paragraphs below. FINANCIAL INSTRUMENTS (IFRS 9, IAS 39 AND IAS 32) Definitions IAS 32 defines a financial instrument as any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity, that is, any contract representing contractual rights or obligations to receive or pay cash or other financial assets. Derivatives are financial assets or liabilities whose value changes in line with the value of an underlying asset, which require little or no initial investment, and which are settled at a future date. Financial assets and liabilities are treated in the financial statements in accordance with the provisions of IFRS 9 as adopted by the European Union. IFRS 9 defines the principles for the classification and measurement of financial instruments, impairment due to credit risk and hedge accounting, excluding macro- hedging transactions. However, it should be noted that CFM Indosuez Wealth Group hasmade use of the option not to apply the general hedge accounting model under IFRS 9. All hedging relations continue to be recognised in accordance with IAS 39 pending future macro-hedging provisions. Measurement of financial assets and liabilities: Initial valuation On initial recognition, financial assets and liabilities are measured at fair value as defined by IFRS 13. Fair value as defined in IFRS 13 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, in the main market or the most advantageous market, at the measurement date. Subsequent valuation After initial recognition, financial assets and liabilities are valued according to their classification either at amortised cost or at their fair value as defined by IFRS 13. Derivatives are always valued at fair value. Amortised cost is the amount at which the financial asset or financial liability is measured on initial recognition. CFM Indosuez does not apply the rule of incorporating transaction costs directly attributable to their acquisition or issue, less principal repayments, plus or minus 59