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Appendix 4 - Methodological notes (1/2) 4. Appendices IFRS 9 Provisions for credit risks: • In accordance with the application of IFRS 9 at 1 january 2018, Bpifrance recognises a correction for changes in value for expected credit losses (ECL) and defines three stages (Buckets) in the process of provisioning credit risk: Performing or under- performing assets, impaired on a collective basis Assets impaired on a specific basis Bucket 1 → assets subject to 12-month ECL Upon initial recognition of the financial instrument, Bpifrance recognises the 12-month expected credit losses Bucket 2 → assets subject to lifetime ECL If the credit quality deteriorates significantly for a given transaction or portfolio, Bpifrance recognises the losses expected to maturity Bucket 3 → doubtful loans impaired to maturity on a specific basis When one or more default events have occurred on the transaction or on a counterparty with an adverse effect on the estimated future cash flows, Bpifrance recognises incurred credit losses to maturity. Subsequently, if the conditions for classifying financial instruments in Bucket 3 are not met, the financial instruments are reclassified in Bucket 2, then in Bucket 1 according to the subsequent improvement in the quality of the credit risk. ⚫ Bpifrance alignes the Basel regulatory default definition and non-performing definition to the doutbful definition (according to accounting principles) and to the Bucket 3 (IFRS 9) definition bpifrance 44

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