FINANCIAL AND ACCOUNTING INFORMATION These amendments are appl icable for annual 3.3 Basis of Consolidation periods beginning on or after January 1, 2018 with The consolidated financial statements include the early application permitted. financial statements for Rexel S.A., parent company •On December 8, 2016, the IFRS Interpretation of the Group, and its direct and indirect subsidiaries Committee issued interpretation IFRIC 22 “Foreign as of December 31, 2017. The subsidiaries (including Currency Transaction and Advance Consideration”. Special Purpose Entities) are control led by the This interpretation addresses how to determine the Group. Control exists when the Group is exposed, or exchange rate for the recognition of the related has rights, to variable returns from its involvement asset, revenue or expense when an entity has with the entity and has the ability to affect those received or paid advance consideration in a foreign returns through its power over the entity. currency. IFRIC 22 is applicable for annual periods In assessing control, present and potential voting beginning on or after January 1, 2018. rights are taken into account. •On June 7, 2017, the IFRS Interpretation The subsidiaries are fully consolidated from the date Committee issued IFRIC Interpretation 23 on which control is obtained to the date when control “Uncertainty over Income Tax Treatments”. This ceases. All assets and liabilities, unrealized gains and interpretation clarifies application of recognition losses, income and expenses, dividends, and other and measurement requirements in IAS 12 “Income transactions arising from intragroup transactions Taxes” when there is uncertainty over income are el iminated when preparing the consol idated tax treatments. The interpretation specifical ly financial statements. addresses the following: Losses within a subsidiary are attributed to the – whether an entity considers uncertain tax non-controlling interests for their share even if that treatments separately, results in a deficit balance. – the assumptions an entity makes about the examination of tax treatments by taxation 3.4 Foreign currency translation authorities, Items included in the financial statements of each of – how an entity determines taxable profit (tax the Group’s entities are measured using the currency loss), tax bases, unused tax losses, unused tax of the primary economic environment in which the credits and tax rates, entity operates (the functional currency). – how an entity considers changes in facts and The functional currency of Rexel and the presentation circumstances. currency of the Group’s financial statements are the euro. I FRIC 23 is applicable for annual periods beginning on or after January 1, 2019, with early application Foreign currency transactions permitted. Transactions in foreign currencies are translated •On December 12, 2017, the IASB published Annual into the functional currency at the exchange rate Improvements to IFRS Standards 2015–2017 Cycle, prevailing at the date of the transaction. containing certain amendments to IFRSs and in Monetary assets and l iabi l ities denominated in particular: foreign currencies at the balance sheet date are – IAS 12 “Income Taxes” — The amendments clarify translated into the functional currency at the foreign that al l income tax consequences of dividend exchange rate prevailing at that date. Exchange gains payments should be recognized in profit or loss, and losses resulting from the settlement of foreign regardless of how the tax arises. currency transactions and from the translation at – IAS 23 “Borrowing Costs” — The amendments the closing date exchange rates of monetary assets clarify that if any specific borrowing remains and liabilities denominated in foreign currencies are outstanding after the related asset is ready for recognized in the income statement. Non-monetary its intended use or sale, that borrowing becomes assets and liabilities that are measured at cost in a part of the funds that an entity borrows generally foreign currency are translated using the exchange when calculating the capital ization rate on rate at the date of the transaction. general borrowings. Foreign operations These amendments are appl icable for annual The assets and l iabi l ities of foreign operations, periods beginning on or after January 1, 2019. including goodwi l l and fair value adjustments REXEL 2017 – REGISTRATION DOCUMENT 222