Carrefour - 2017 Registration Document

5 CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 Notes to the Consolidated Financial Statements CARREFOUR | 2017 REGISTRATION DOCUMENT 237 Working capital 5.4 Change in working capital 5.4.1 The change in working capital reported in the consolidated statement of cash flows under “Net cash from operating activities” breaks down as follows: (in millions of euros) 2017 2016 Change Change in inventories 28 (350) 378 Change in trade receivables (73) (117) 44 Change in trade payables 324 1,083 (759) Change in loyalty program liabilities (29) (2) (27) Change in trade working capital requirement 250 614 (365) Change in other receivables and payables (93) (160) 67 CHANGE IN WORKING CAPITAL REQUIREMENT 157 454 (297) Working capital, like all other items in the statement of cash flows, is translated at the average rate for the period. Inventories 5.4.2 Accounting principles In accordance with IAS 2 – Inventories, goods inventories and the inventories of the property development business (properties under construction) are measured at the lower of cost and net realisable value. goods inventories includes all components of the purchase cost of goods sold (with the exception of exchange gains and losses) and takes into account the rebates and commercial income negotiated with suppliers. The cost of goods inventories corresponds to the latest purchase price plus all related expenses. This method is appropriate given the rapid inventory turnover, and the resulting values are close to those obtained by the first in-first out (FIFO) method. The cost of Net realisable value corresponds to the estimated selling price in the ordinary course of business, less the estimated additional costs necessary to make the sale. (in millions of euros) December 31, 2017 December 31, 2016 Inventories at cost 6,927 7,278 Impairment (237) (239) INVENTORIES, NET 6,690 7,039 Trade receivables 5.4.3 Accounting principles Trade receivables correspond for the most part to rebates and commercial income receivable from suppliers, amounts receivable from franchisees, shopping mall rental receivables and receivables of the property development business. They represent financial instruments classified as “Loans and receivables” (Note 12). estimate of the debtor’s ability to pay the amount due and the age of the receivable (Note 12.7.4). Trade receivables are initially recognised for the invoice amount. Impairment losses are recognised where necessary, based on an Certain Group subsidiaries operate receivables discounting programmes. In accordance with IAS 39 – Financial Instruments: Recognition and Measurement, receivables sold under these programmes are derecognised when substantially all of the related risks and rewards (i.e., mainly default, late payment and dilution risks) are transferred to the buyer.