5 _369 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE 2023 consolidated financial statements 3.2 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the Group's Management. The Managing Chairman regularly examines segment operating income to assess segment performance. He has therefore been identified as the chief operating decision maker of the Group. 3.3 Foreign currency 3.3.1 Presentation and functional currency The financial statements of the Group entities are measured using their functional currency, which is the currency of the primary economic environment in which they operate and corresponds for most of them to their local currency. The consolidated financial statements are presented in euros (presentation currency), which is the Company's functional currency. 3.3.2 Transactions Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the revaluation at closing exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Exchange differences on unconsolidated equity investments are included in other comprehensive income until the investment is sold. 3.3.3 Translation The financial statements of the Group entities whose functional currency is different from the Group's presentation currency are translated into euros as follows: assets and liabilities are translated at the closing rate at the date of the consolidated statement of financial position, income and expenses are translated at the average rate for the period (as it is considered a reasonable approximation to actual rates at the transaction date), and all resulting exchange differences are recognized in other comprehensive income. Cash flows are also translated at the average rate for the period. When an entity is disposed of, the translation differences accumulated in other comprehensive income are recycled to the income statement as part of the gain or loss on disposal. On the acquisition of an entity, goodwill and fair value adjustments recognized are treated as assets and liabilities of the acquired entity and translated at the spot rate on the transaction date. 3.3.4 Exchange rates of major currencies Against the euro (EUR): Closing rates Average rates 2023 2022 2023 2022 US dollar (USD) 1.111 1.062 1.082 1.054 Canadian dollar (CAD) 1.466 1.443 1.460 1.370 Mexican peso (MXN) 18.787 20.611 19.177 21.206 Brazilian real (BRL) 5.364 5.592 5.401 5.435 Pound sterling (GBP) 0.868 0.883 0.870 0.852 Chinese yuan (CNY) 7.899 7.393 7.656 7.081 Indian rupee (INR) 92.508 87.902 89.331 82.732 Thai baht (THB) 37.950 36.754 37.617 36.874
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