Orano - Annual Activity Report 2025 329 FINANCIAL STATEMENTS 6 Consolidated financial statements – financial year ended December 31, 2025 1.3.9.1 Classification and measurement of financial assets and liabilities IFRS 9 requires financial assets to be classified in one of three categories: amortized cost, fair value through profit or loss, or fair value through other items of comprehensive income, depending on the business model defined by the entity and the characteristics of its contractual cash flows (the so-called “Solely Payments of Principal and Interest” criterion or SPPI). Assets meeting the definition of debt instruments (contractual cash flows associated with interest payments and repayments of capital) are recognized: ● at amortized cost when the group holds them in order to collect all contractual cash flows; ● at fair value through profit or loss when the group holds them in order to sell them and realize a capital gain; ● at fair value through other items of comprehensive income where the group holds them for the mixed purpose of collecting contractual cash flows and selling them (with the gain or loss recycled in profit or loss on the date of transfer). Assets meeting the definition of equity instruments (equities or equity mutual funds) are recognized at fair value through profit or loss unless the group opts irrevocably to recognize them at fair value through other items of comprehensive income (without recycling gains or losses in profit or loss). As an exception to these principles, certain instruments may be recognized at fair value through profit or loss when this treatment makes it possible to offset a matching position affecting the statement of income. 1.3.9.2 Measurement methods for financial assets and liabilities With the exception of financial assets and liabilities measured at amortized cost, the group measures its financial assets and liabilities at fair value at the reporting date. Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability as part of a normal transaction between market participants on the measurement date. All assets and liabilities measured at fair value are valued using techniques that seek to maximize the use of observable market data. These techniques are hierarchical, and have three levels: ● level 1 (unadjusted quoted prices): price at which the group may access identical assets or liabilities in active markets; ● level 2 (observable inputs): valuation techniques based on inputs that are observable, either directly or indirectly, in an active market for similar instruments; and ● level 3 (unobservable inputs): valuation techniques primarily using unobservable inputs, including observable inputs with significant adjustments. 1.3.9.3 Financial assets earmarked for end-of-lifecycle operations This heading brings together all the investments that Orano earmarks for the funding of its future end-of-lifecycle operations in nuclear operations, including facility dismantling and waste retrieval and packaging. It includes directly-held publicly traded shares and bonds, earmarked equity mutual investment funds, earmarked bond and money-market mutual investment funds, and cash. It also includes receivables resulting from agreements with third parties for the funding of end-of-lifecycle operations; these receivables are recognized using the method described in Note 1.3.9.5. Orano does not consolidate the assets of its earmarked mutual funds line by line, insofar as it does not control them within the meaning of IFRS 10: ● Orano is not involved in the management of the earmarked mutual funds, which are managed by front-ranking independent management companies; ● Orano does not hold voting rights in the mutual funds; ● the mutual funds do not trade directly or indirectly in financial instruments issued by Orano; ● none of the financial investments made by the mutual funds are strategic to Orano; ● Orano receives no benefit and bears no risk other than that normally associated with investments in mutual funds and in proportion to its holding; and ● the management agreements restrict Orano’s ability to terminate contracts to specific cases (gross negligence, fraud, etc.). This means that Orano cannot replace a fund’s management company at will. Accordingly, the earmarked mutual funds are recorded on a single line in the statement of financial position in an amount corresponding to Orano’s share of their net asset value as of the reporting date. Other than French government bonds and the EDF and CEA receivable, resulting from the overfinancing of Andra, which are recognized at amortized cost, the entire portfolio of assets earmarked for end-of-lifecycle operations is recorded as financial assets at fair value through profit or loss. 1.3.9.4 Loans, advances, and deposits This heading mainly includes loans related to unconsolidated interests, advances for acquisitions of interests, and security deposits. These are valued at amortized cost. Impairment is recognized when the recoverable amount is less than the carrying amount. 1.3.9.5 Trade receivables Trade receivables are recognized using the amortized cost method. Impairment is calculated on the basis of the expected credit loss model. Under this model, 12-month expected credit losses (resulting from the risk of default in the next 12 months) are recorded on issued or purchased instruments at their initial recognition. Full lifetime expected credit losses (resulting from the risk of defaults over the remaining life of the instrument) are recognized when a significant increase in credit risk is recorded after initial recognition or in the case of short-term trade receivables. The group determines the expected loss based on (a) the amount of exposure at default, (b) the associated loss-given-default rate, and (c) the probability of default.
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