CFM Indosuez Wealth Management Annual Report 2022 78 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 following components and depreciation periods have been adopted by the Crédit Agricole Group following the application of component-based accounting for property, plant and equipment. It should be noted that these depreciation and amortisation periods are adapted to the nature of the buildings and their location: Component Amortisation period Land Non depreciable Buildings 30 to 50 years Building finishings 8 to 40 years Technical installations 5 to 25 years Fixtures and fittings 5 to 15 years Computer equipment 3 to 7 years Software and other intangible assets 1 to 7 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. The resulting translation adjustments are recorded in the Income Statement. 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); - items at fair value are measured at the foreign exchange rate 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 that may not be reclassified if the gain or loss on the non-monetary item is recorded in other comprehensive income that may not be reclassified. 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 customer: - the result of a transaction associated with the provision of services is recognised under “Commissions” when transferring control of the service to the customer 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). a) Fees and commission for ongoing services (e.g. fees and commission for means of payment) are recognised in income according to the degree of progress of the service provided. b) Fees and commission paid or received for oneoff services are recognised in full in the Income Statement once the service has been provided. Commissions payable or receivable subject to the achievement of a performance obligation are recognised at the amount for which it is highly likely that the income thus recognised will not be subject to a significant downward adjustment when the uncertainty is resolved. This estimate is updated at the end of each reporting period. In practice, this
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