83 deferred tax is not recognised on these gains. When the securities concerned are classified as financial assets at fair value throughother comprehensive income, unrealisedgains and losses are recognised directly through other comprehensive income. The tax chargeor effective tax saving borne by the entity in respect of these unrealised gains or losses is reclassifiedasadeduction fromthesegainsor losses. For leases recorded under IFRS 16where the Group is lessee, a deferred tax liability is recognised for the right to use the asset andadeferred tax asset is recorded for the lease liability Current and deferred taxes are recognised in net income for the year unless the tax is generated: • by a transaction or event that is recognised directly in other comprehensive income, in the same year or in a different year, in which case it is directly debited from or credited to other comprehensive income; • or from a business combination. Deferred tax assets and liabilities are offset if, and only if: • the entity has a legally enforceable right to offset current tax assets and liabilities; • deferred tax assets and liabilities relate to income taxes levied by the same tax authority: a) on the same taxable entity, b) or one different taxable entities that intend to either settle the current tax liabilities and assets on a net basis or realise the assets and settle the liabilities concurrently in each of the following years in which it is expected that significant amounts of deferred tax assets or liabilities will be settled or recovered. 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 theprovisionsof IAS16, thedepreciableamount takesaccount of the potential residual value of property, plant and equipment. Land ismeasured at cost of acquisition, less any impairment losses. Property used in operations, investment property and equipment are recognised at cost of acquisition less accumulateddepreciationand impairment losses sincebeing 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 inabusinesscombination resulting fromcontractual rights (e.g. a distribution agreement). These are valued on the basis of the corresponding future economic benefits or expected service potential. Fixedassets aredepreciatedover their estimateduseful lives. CFM IndosuezWealth Group uses the following depreciation components and periods under the component accounting approach. It should be noted that these depreciation and amortisation periods are adapted to the nature of the buildings and their location: Component Depreciation/ Amortisation period Buildings 30 to 50 years Fixtures & fittings 6 to 10 years Furniture & equipment 5 to 10 years Transport equipment 5 years IT equipment 3 years Software and other intangible non-current assets 1 to 7 years Foreign currency transactions (IAS 21) Assets and liabilities denominated in foreign currencies are translated into CFM Indosuez Wealth’s operating currency, the euro, on the balance sheet date. 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-currencydenominatedmonetaryassetsand liabilities are translated at the closing rate. The resulting translation adjustments are recorded in the Income Statement. This rule has three exceptions: - for debt instrumentsmeasured at fair value through other comprehensive income, the translation difference calculatedon the amortised cost is recognised in income; the balance is recorded in other comprehensive income recyclable to income; - foreign exchange differences on items classified as cash flow hedges or as part of a net investment in a foreign operation are recognised in other comprehensive income recyclable to income for the effective part; - for financial liabilities at fair value through profit or loss as an option, the exchange differences related to changes in the fair value of own credit risk is recorded in nonrecyclable equity. 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 nonmonetary 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
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