SFIL Annual financial report 2018

4 I Annual financial statements in accordance with French GAAP 116 SFIL Annual Financial Report 2018 1. Accounting and valuation policies 1.1 - APPLICABLE ACCOUNTING STANDARDS: RULES ADOPTED BY THE FRENCH ACCOUNTING STANDARDS BOARD (AUTORITÉ DES NORMES COMPTABLES – ANC) SFIL prepares its financial statements in compliance with ANC Regulation n°2014-07 issued on November 26, 2014 and related to the accounts for the reporting entities of the banking sector, and in particular credit institutions. As stated in it article 3 and subject to the provisions of the lat- ter regulation, these reporting entities prepare their financial statements in compliance with ANC Regulation n°2014-03 issued on June 5, 2014 and related to general accounting plan. The financial statements are furthermore in accord- ance with the indications of Directive 86/635/EEC of the Council of European Communities. The financial statements as of December 31, 2018, were pre- pared using the same accounting policies as those used in the financial statements as of December 31, 2017. Between these two dates, the applicable regulation has in particular been amended as such: • ANC Regulation n°2018-01 issued on April 20, 2018 (amending ANC Regulation n°2014-03) : this regulation redefines the changes in “accounting policies”, the changes in “accounting estimates” and “errors corrections” under French GAAP, more closely into line with the definitions under international accounting standards (IAS 8). Appli- cable to the reporting periods opened at the date when it was published (i.e. 2018 annual period for SFIL), this regu- lation reaffirms the accounting principle of consistency in applying accounting policies and further elaborates that only one or the other of the following exemptions shall be retained: either the change is required by an amendment of the accounting regulation, or, when the accounting regulation has not been amended, a choice between sev- eral accounting policies is provided and the change ulti- mately enhances the quality of financial information. The accounting treatments to recognize these changes and corrections are further detailed but these treatments are not significantly amended, a change in accounting policies remaining in practice the only case to result in a retro- spective retreatment. Moreover, ANC reviews the listing of the “reference methods”, formerly referred as “preferential methods”. This regulation has no material impact on SFIL financial statements presented below, mainly due to the fact that during the 2018 annual reporting period SFIL has enforced no change in accounting policies within the meaning of this regulation. • ANC Regulation n°2018-02 issued on July 6, 2018 (amend- ing ANC Regulation n°2014-03) : this regulation amends the general accounting plan so as to adapt it to the entry into force of the income tax at source on January 1, 2019. Applicable from this date, the regulation clarifies the prin- ciples of recognition of the income tax at source and introduces the new accounts created in that purpose. This regulation has no impact on SFIL financial statements presented below, given that it is applicable only from Jan- uary 1, 2019. From 2019 however, SFIL will recognize the income tax at source in compliance with the principles laid down by this regulation. • ANC Regulation n°2018-07 issued on December 10, 2018 (amending ANC Regulation n°2014-03) : this regulation amends the general accounting plan so as to clarify the way crypto-assets, referred as “jetons” in the regulation, issued in particular in the event of ICOs (Initial Coin Offer- ings) or subsequently purchased in the secondary market shall be recognized in the accounts of both the issuer and the holder. In addition to the clarification of the account- ing principles governing these instruments, this regulation introduces the new items of the individual financial state- ments created to recognize these “jetons” and the under- lying accounts. This regulation has no impact on SFIL financial statements presented below, given that it has issued and holds no crypto-assets (“jetons”). 1.2 – ACCOUNTING PRINCIPLES APPLIED TO THE FINANCIAL STATEMENTS The financial statements have been prepared in accord- ance with French generally accepted accounting princi- ples, respecting the principles of prudence, sincerity and true and faithful image, on the basis of the following assumptions: •  going concern principle, •  segregation of accounting periods, •  consistency of methods, •  historical costs, •  no netting principle, •  intangibility of the opening balance sheet. 1.2.1. Loans and advances to banks and to customers Loans and advances to banks include all loans connected to banking transactions with credit institutions, except securi- ties. They are broken down into sight accounts and term loans. Loans and advances to customers comprise mainly loans granted in the form of export credits. Loans and advances to customers are recognized in the balance sheet net of impairment for possible losses. The undrawn portion of signed loan contracts is recognized as an off-balance sheet item. Interest on loans is recognized as Interest income , prorata temporis for accrued amounts due and not yet due, as is interest on past-dues. Commissions received and marginal transaction costs related to the granting or the acquisition of a loan, if they are significant, are amortized over the maturity of the loan. Other commission income is immediately recognized in the income statement. Notes to the French GAAP financial statements