FINANCIAL INFORMATION CONCERNING THE GROUP’S ASSETS AND LIABILITIES, FINANCIAL POSITIONAND PROFITS AND LOSSES 20 the customer obtains control of the goods or services. The statements upon adoption of these amendments. standard supersedes IAS 18 Revenue, IAS 11 Construction • On December 8, 2016, the IASB issued Annual Improvements Contracts and a number of revenue-related interpretations. to IFRS (2014-2016) which includes various amendments to This standard is effective for annual periods beginning on or IFRS. The Group does not expect that the adoption of these after January 1, 2018. As the Group does not generate yet amendments wil l be material to its consolidated financial revenue from contracts with customers, there will be no impact statements. on the consolidated financial statements. The Group does not plan to early adopt these new standards, • On July 24, 2014, the IASB issued the final version of IFRS 9 amendments and interpretations. Financial Instruments (2014) which replaces IAS 39 Financial Instruments: Recognition and Measurement (“IA 3”,S9)bringing The accounting policies and measurement principles adopted for together the classification and measurement, impairment and the consolidated financial statements as of and for the year ended hedge accounting. IFRS 9 introduces a single approach for the December 31, 2017 are the same for the comparative period classification and measurement of financial assets according presented. to their cash flow characteristics and the business model they 2.2 Going concern are managed in. It provides a new impairment model based on expected credit losses. IFRS 9 also includes new regulations The historical deficit position of the Group is explained by the regarding the application of hedge accounting to better reflect innovative character of the products developed, which thus an entity’s risk management activities especially with regard involved a research and development phase of several years to managing non-financial risks. IFRS 9 is effective for annual preceding the marketing thereof. periods beginning on or after January 1, 2018, with early The available cash and cash equivalents as of December 31, 2017 adoption permitted. The Group does not expect that there will in the amount of €55.4 million and the reimbursement of the 2017 be a material change to its consolidated financial statements Research Tax Credit in the amount of €3.7 million expected during upon adoption of this new standard. the second half year of 2018 should enable the Group to cover its • On January 13, 2016, the IASB issued IFRS 16 Leases which cash requirements through the next 12 months. specifies how an entity will recognize, measure, present and disclose leases. IFRS 16 eliminates the current classification Note 3: Accounting principles model for lessee’s lease contracts as either operating or finance 3.1 Consolidation scope and methods leases and, instead, introduces a single lessee accounting model On April 28, 2017 the Group incorporated GenSight Biologics Inc. requiring lessees to recognize right-of-use assets and lease in the United States. As 100% of the voting rights and ownership liabilities for leases with a term of more than 12 months. This interests are held by the Group, GenSight Biologics Inc. is fully brings the previous off-balance leases on the balance sheet in a consolidated. manner largely comparable to current finance lease accounting. The Group is still in the process of assessing whether there will 3.2 Functional currency and translation of financial statements in be a material change to its consolidated financial statements foreign currency upon adoption of this standard. IFRS 9 is effective for annual The Financial Statements are presented in thousands of euros periods beginning on or after January 1, 2019. (“KEuros”), which is also the functional currency of the parent • In May 2017, the IASB issued IFRIC 23, Uncertainty Over Income Company GenSight Biologics S.A. The statements of financial Tax Treatments. The interpretation clarifies the recognition and position of GenSight Biologics Inc. having a functional currency measurement requirements when there is uncertainty over different from the euro are translated into euros at the closing income tax treatments. In assessing the uncertainty, an entity exchange rate (spot exchange rate at the statement of financial shall consider whether it is probable that a taxation authority position date), and the statements of income, statements of will accept the uncertain tax treatment. IFRIC 23 is effective comprehensive income and statement of cash flow of GenSight for annual reporting periods beginning on or after January 1, Biologics Inc. are translated at the average period to date exchange 2019, while earlier application is permitted. The Group is rate. The resulting translation adjustments are included in equity currently assessing the impacts of adopting the interpretation under the caption “Cumulative translation adjustment” in the on the Group’s consolidated financial statements. Consolidated Statement of Changes in Shareholders’ Equity. • The IASB also issued various amendments and clarifications to 3.3 Intangible assets IAS 7, IAS 12, IAS 28 and IFRS 10, IAS 40, IFRS 2, IFRS 4 and Pursuant to IAS 38 Intangible Assets (“IAS 38”), intangible assets IFRS 15. The Group is still in theprocess of assessing whether acquired are recognized as assets on the Consolidated Statement there wil l be a material change to its consolidated financial of Financial Position at their acquisition cost. GENSIGHT BIOLOGICS – 2017 Registration Document– 191