Universal Registration Document 2019

61 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 The rules for the presentation and definition of non-recurring income and expenses remain unchanged compared to December 31, 2018. To the Company’s knowledge, there are no other litigation, arbitration or non-recurrent events that have, or have had, a significant impact on the financial situation, earnings, business or assets of the LISI Group. 3.5.7  /  Financial result (income) (in thousands of euros) 12/31/2019 12/31/2018 FINANCING EXPENSES AND REVENUE ON CASH Revenue on cash 3,247 3,263 Impact of the change in fair value of positive interest rate hedges 297 199 Impact of the change in fair value of negative interest rate hedges (235) (80) Financing expenses (7,636) (5,885) SUBTOTAL INCOME FROM CASH AND CASH EQUIVALENTS (4,328) (2,503) OTHER INTEREST REVENUE AND EXPENSES Foreign exchange gains 26,688 42,635 Foreign exchange losses (27,212) (29,966) Impact of the change in fair value of currency hedges (3,279) (4,084) Other (418) (738) SUBTOTAL OTHER INTEREST REVENUE AND EXPENSES (4,221) 7,846 FINANCIAL RESULT (INCOME) (8,548) 5,343 Cost of finance and other financial charges and income The cost of finance includes: ■ interest charges on loans calculated using the effective interest rate method; ■ interest charges included in payments made for a finance lease and calculated using the effective interest ratemethod; ■ interest income generated from current investments; ■ variations in fair value of financial instruments; ■ income from dividends of non-consolidated companies is recognized in the income statement when the Group becomes entitled to receive payments, i.e. in the case of quoted securities, on the coupon date. Other financial income and expensesmainly include exchange profits and losses. The decrease in financial income compared to 2018 is mainly due to the rise in financing expenses following the implementation of IFRS 16. The financing expenses recognized under this standard for the 2019 financial year totaled €2.1 million. 3.5.8  /  Corporate tax Income tax (expense or income) includes: ■ the tax expense (income) to be paid for each financial year and the deferred tax expense (income). The tax is recognized as income, except if it relates to items that are directly recognized as equity. In this case it is recognized as equity. ■ Deferred taxation is calculated using the variable carry forward method for all timing differences at year-end between taxable and accounting values of assets and liabilities on the consolidated balance sheet. Fiscally non- deductible goodwill does not give rise to a declaration of deferred tax. Deferred tax assets are only recognized if their recovery is probable. Deferred tax debits and credits are measured at the tax rates that will be applicable when the timing differences are settled. A deferred tax asset on loss carry-forwards is recognized only insofar as it is likely that the relevant subsidiary or its tax consolidation scope will have future taxable profits to which tax loss carryforwards can be attributed. ■ The Group decided to classify the CVAE (Tax on Companies’ Added Value) as a tax on income to be entered in the scope of application of IAS 12. This choice ensures consistencywith the accounting treatment applied to similar taxes in other countries. Revenues related to the research tax credit are classified in the income statement under “Other income.”