Orano - Annual Activity Report 2025 328 6 FINANCIAL STATEMENTS Consolidated financial statements – financial year ended December 31, 2025 1.3.7.5 Impairment of intangible and tangible fixed assets and goodwill Assets that do not generate cash flows that are largely independent of each other are grouped together in the cash-generating units (CGUs) to which these assets belong. CGUs are uniform sets of assets whose ongoing use generates cash inflows that are largely independent of the cash inflows generated by other groups of assets. They reflect the way in which activities are managed within the group. Impairment tests are performed on intangible and tangible fixed assets with finite useful lives whenever there is an indication of impairment. Impairment losses on intangible or tangible fixed assets may be reversed later if there has been a change in the estimates used to determine the recoverable value of the asset and if that amount again comes to be greater than the net carrying amount. The value of the asset after reversal of the impairment loss is capped at the carrying amount net of amortization, as if no impairment loss had been recognized in prior years. The recoverable value of unmined deposits in the Mining Business is measured on the basis of multiples of land (i.e. by comparison with resources and reserves valued according to the market capitalization of juniors comparable to the group’s mineral deposits that have not been mined). Reversals of impairment losses, when possible, are assessed in the light of changes in these multiples and future operating prospects. In addition, impairment tests are systematically performed at least once a year for goodwill and intangible assets with indefinite lives, and whenever there is an indication of loss of value. Such tests are performed at the level of the cash-generating units (CGU) or groups of CGUs to which the goodwill and intangible assets belong. Impairment is recognized when the recoverable amount of the CGU is less than the net carrying amount of the assets belonging to it. Impairment losses recognized on goodwill cannot subsequently be reversed. The group performs impairment tests on its assets on the basis of its best estimate of their recoverable value, which is the greater of: ● its fair value less costs to sell, corresponding to the net realizable value based on observable data, when available (recent transactions, offers received from potential acquirers, reported ratios for comparable publicly traded companies, multiples of uranium resources in the ground obtained by comparing the market capitalizations of comparable companies with the stated deposit reserves or resources); and ● its value in use, which is equal to the present value of projected future cash flows generated, resulting from the strategic plan validated by the governance bodies and underlying assumptions, plus the “terminal value”, corresponding to the value forecast and discounted to infinity, of cash flows for the “normative” year estimated at the end of the period covered by future cash flow projections. However, some CGUs or groups of CGUs have finite lives (depending on the volume of ore resources in Mining or the duration of operating permits in nuclear operations); in such cases, the cash flows taken into account to assess their value in use are not forecast and discounted to infinity but within the limit of their expected useful lives. The discount rates used are based on the weighted average cost of capital of each of the assets or groups of assets concerned. They are calculated after tax. Impairment tests are sensitive to the macroeconomic (including the US dollar exchange rate) and sector-based assumptions used, particularly in terms of changes in ore prices or those of conversion and enrichment services, as well as the useful lives of the underlying assets. In view of this sensitivity, the group revises its underlying estimates and assumptions at least once a year, or more often as required by changes in market conditions. 1.3.8 Inventories and work-in-process Inventories are carried at the lesser of their historical cost and their net realizable value, which is the estimated selling price in the ordinary course of business, less anticipated completion costs or costs to sell. Inventory consumption is generally measured using the weighted average unit cost method. The entry cost of inventories includes all direct material costs, labor costs and the allocation of indirect production costs. In the case of material loans with transfer of ownership, the group recognizes in inventory the borrowed material at the weighted average unit cost, which corresponds to its estimated fair value on the transaction date. In return, a liability corresponding to the obligation to return the material, valued at each reporting date, according to the return assumption (based on the group’s future production or external purchases), is recognized in “Trade payables and related accounts”. 1.3.9 Financial assets and liabilities Financial assets Financial assets consist of: ● financial assets earmarked for end-of-lifecycle operations; ● equity interests in unconsolidated companies; ● loans, advances, and deposits; ● trade accounts receivable and related accounts; ● certain other operating receivables; ● pledged bank accounts; ● cash and cash equivalents; and ● the positive fair value of derivatives. Financial liabilities Financial liabilities include: ● borrowings; ● trade payables and related accounts; ● certain other operating liabilities; ● bank overdrafts; and ● the negative fair value of derivatives.
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