www.se.com Schneider Electric Universal Registration Document 2021 416 Chapter 6 – Parent Company Financial Statements Own shares Treasury stocks are assessed by category (shares in subsidiaries and affiliates, marketable securities), according to the FIFO. method “ first-in, first-out ”. The accounting classification of treasury stocks depends on the purpose for which they are held: • own shares are classified in marketable securities if they are the object of an explicit allocation to cover performance share distribution plans or if they are bought to regulate the share price of the Group; • own shares are classified in long-term investments if they are not the object of an explicit allocation to cover a performance share or if they are bought with the aim of their use within the context of a liquidity contract by an investment services provider, or of their later cancellation within the framework of a capital reduction. The accounting of an impairment of own shares depends on the purpose for which they are held: • when own shares are allocated to cover of performance share distribution plans, there is no reason to record a provision for impairment; • in other cases, it is necessary to book an impairment if the average stock market price of the month before the closing is lower than the weighted average cost. Pension obligations The present value of termination benefits is determined using the projected unit credit method. Provisions are funded for the supplementary pension benefits provided by the company on the basis of the contractual terms of top-hat agreements, granting a level of benefits exceeding the general regimes. The company applies the corridor method to actuarial gains and losses arising from changes in estimates. Under this method, the portion of net cumulative actuarial gains and losses exceeding 10% of the projected benefit obligation is amortized over 10 years. Currency risk When necessary, a contingency provision is put in place for unrealized exchange losses. However, when there are unrealized exchange gains and losses on back-to-back transactions in the same currency and with the same maturity, the amount of the provision is then limited to the net loss. Bonds Issue costs are amortized over the life of the bonds and are booked under “deferred expenses”.Issuance premiums are booked under “Call premiums” & amortized over the duration of the bonds. In the case of convertible bond (OCEANE), at conversion, the bond will be reclassified as equity for its nominal conversion amount. 6.3.3 Notes Note 1: Non-current assets 1.1 – Intangible assets This item primarily consists of share issue and merger expenses, which are fully amortized. 1.2 – Property, plant and equipment (in thousands of euros) Property, plant and equipment Dec. 31, 2020 Additions Disposals Dec. 31, 2021 Cost 4,301 – (247) 4,054 Depreciation (290) – 242 (48) NET 4,011 – (5) 4,006 Property, plant and equipment are mainly comprised of land not built. 6.3 Notes to the financial statements