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Consolidated Financial Statements as of December 31, 2015
Notes to the Consolidated Financial Statements
Credit risk
12.6.4
The Group's estimated exposure to credit risk is presented below:
(in millions of euros)
December 31, 2015
December 31, 2014
Investments in non-consolidated companies
78
78
Other long-term investments
1,213
1,262
Total Other non-current financial assets
1,291
1,340
Consumer credit granted by the financial services companies
6,010
5,980
Trade receivables
2,269
2,260
Other current financial assets
358
504
Other assets
(1)
418
551
Cash and cash equivalents
2,724
3,113
MAXIMUM EXPOSURE TO CREDIT RISK
13,071
13,748
Excluding prepaid expenses.
(1)
Retail business
12.6.4.1
Bancassurance business
12.6.4.2
1) Trade receivables
1) Credit risk management
Trade receivables correspond mainly to amounts receivable from To protect against default by borrowers, the Group’s financial services
franchisees (for delivered goods and franchise fees), suppliers (mainly
companies have set up systems to check the quality and repayment
rebates) and tenants of shopping mall units (rent). Impairment losses
capacity of their customers. These include:
are recognized where necessary, based on an estimate of the debtor’s
decision-making aids such as credit scoring applications,
●
ability to pay the amount due and the age of the receivable.
income/debt simulation tools and credit history checking
At December 31, 2015, trade receivables net of impairment (excluding
procedures;
receivables from suppliers) amounted to 1,173
million euros
interrogation of positive and negative credit history databases,
●
(Note
5.4.3). At that date, past due receivables amounted to a net
where they exist;
112 million euros, of which 32 million euros were over 90
days past
active management of collection processes;
●
due (2.7% of total trade receivables net of impairment). No additional
credit risk monitoring and control systems.
●
impairment has been recognized for these receivables as the Group
considers that the risk of non-recovery is very limited.
Within each credit company, a Credit Risk department is responsible
for all of these processes, and the Board of Directors receives copies of
2) Investments (cash equivalents and other current
all Credit Risk Management Committee reports.
financial assets)
At Group level, a Credit Risk – Europe unit has been set up to oversee
The Group’s short-term cash management strategy focuses on
and implement credit risk management policies in France, Spain,
acquiring liquid investments that are easily convertible into cash and
Belgium and Italy.
are subject to an insignificant risk of changes in value. Investments are
made for the most part by Corporate Treasury and Financing, in
2) Impairment for non-performing consumer loans
diversified instruments such as term deposits with leading banks and
Consumer loans are classified as non-performing when the Group
mutual funds classified by the AMF as "money market" and
believes that there is a risk that all or part of the amount due will not be
"short-term money market" funds without any withdrawal restrictions.
recovered (for example, because of overdue payment).
Investments made at the country level are approved by Corporate
Impairment models are developed in accordance with IAS
39 –
Treasury and Financing. Counterparty risk monitoring procedures are
Financial Instruments: Recognition and Measurement
and local
implemented to track counterparties' direct investment strategies and
banking regulations in each country, according to a two-step process:
the underlying assets held by mutual funds in which the Group invests.
The Group’s objective is to never hold more than 5% of a fund’s units
classification of outstanding loans in uniform risk categories based
●
and to never invest more than 250 million euros in any single fund.
on the probability of default; then
modeling of the loss given default based on historical data.
●
In a certain number of countries, specific provisions are also recorded
for certain types of exposures, to comply with local central bank
guidelines.
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