Orano - Annual Activity Report 2025 327 FINANCIAL STATEMENTS 6 Consolidated financial statements – financial year ended December 31, 2025 In the event of the acquisition of a group of assets, the group has chosen, for the allocation of the acquisition cost, to measure the assets and liabilities that are not measured at cost according to the IFRS standards applicable to them, then allocate the residual acquisition cost to the assets and liabilities measured at cost price in proportion to their respective values (IFRIC Update 11/17). The cost of in-house facilities includes all labor costs, parts and all other production costs involved in the construction of the asset. The cost of nuclear facilities includes the group’s share of provisions for end-of-lifecycle operations, estimated at their commissioning date, termed “Dismantling assets of nuclear facilities” (see Note 1.3.12). In accordance with IFRIC 1, changes in provisions for end-of-lifecycle operations coming from changes in estimates or calculation assumptions and relating to nuclear facilities in operation are offset by a change of the same amount to the assets to which these provisions relate. Tangible fixed assets are depreciated based on the approach deemed most representative of the economic impairment of the assets (straight-line depreciation or as a function of the production units); each component is depreciated over its specific useful life. Mining land is depreciated over the operating period of the deposit; site layout and preparation expenses are depreciated over 10 years; buildings over 10 to 45 years; production facilities, equipment and tooling other than nuclear facilities over 5 to 10 years; general facilities and miscellaneous fixtures over 10 to 20 years; industrial packaging over 10 to 20 years, and other transportation equipment, office equipment, computer equipment and furniture over 3 to 10 years. Nuclear facilities are depreciated on a straight-line basis over their estimated useful lives. Depreciation periods are revised if there is a significant change in their estimated useful lives. Changes in the value of dismantling assets of nuclear facilities are amortized on a prospective basis over the remaining useful lives of the facilities. 1.3.7.3 Leases Leases are recognized in the statement of financial position as soon as they come into effect, by the recognition of right-of-use assets under “Right-of-use assets – Leases” and a liability recorded under “Lease liabilities.” A contract contains a lease if it gives the group the right to control the use of an identified asset for a specified period in exchange for the payment of a consideration. On the effective date of the contract, the lease liability is equal to the present value of future payments. Lease payments are discounted at the incremental borrowing rate. The rate used, determined by currency and by maturity, is the rate that the lessee would have had to pay to borrow, over a similar period and with a similar guarantee, the funds necessary to obtain goods of similar value to the right to use the leased asset in a similar economic environment. The value of the right of use is determined on the effective date of the lease from the initial amount of the lease liability, plus, where applicable: ● advance payments made to the lessor, net of benefits received from the lessor; ● initial direct costs: these are the incremental costs incurred by the lessee for the conclusion of the contract; and ● the estimated costs of remediation of the leased property; this amount is discounted and recorded against a provision for remediation. In the statement of income, rental expense is replaced by an amortization expense for the right of use and an interest charge. This restatement results in the recognition of deferred taxes. In the statement of cash flows, only the interest expense impacts the cash flows generated by the activity; the repayment of the principal of the lease liability affects the cash flows linked to financing operations. Leases on contracts for assets with a low unit value or for short terms are expensed directly. The right of use and the lease liability are amortized over the term of the lease, which is the firm period of the commitment taking into account optional periods that are reasonably certain to be exercised. The probability of exercising a renewal option or not exercising a termination option is determined by type of contract or on a case-by-case basis based on contractual and regulatory provisions, the nature of the underlying asset, its specific features and its location, as appropriate. For impairment testing, right-of-use assets are allocated to the CGU or group of CGUs to which they belong. To this end, the value of the right-of-use asset is integrated into the carrying amount of the CGU or group of CGUs and the lease payments used to calculate the lease liability are excluded from the future cash flows used to determine the value in use of the CGU or group of CGUs tested. These procedures for carrying out impairment testing in connection with the application of IFRS 16 did not have a material impact on the results of testing in view of the amount of right-ofuse assets. 1.3.7.4 Incorporation of borrowing costs In accordance with IAS 23 revised, effective since January 1, 2009, the borrowing costs related to acquisitions of intangible and tangible fixed assets for projects initiated after that date and for which the construction or development period is greater than one year are included in the costs of these assets. Borrowing costs are not included in the measurement of intangible and tangible fixed assets when: ● they came into service before January 1, 2009; or ● they came into service after this date, but the expenses were incurred and recognized as non-current assets in progress at December 31, 2008.
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