Company: BBVXF
Filing Date: 2025-08-12
Form Type: DRS
Source: 0000950123-25-007520
Chunk: 375

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-08-12
Form: DRS
Chunk 375
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 of the net fair value of the assets, liabilities and contingent liabilities of the acquired entities are recognised as goodwill on the asset side of the consolidated balance sheet. These differences represent an advance payment made by the Group of the future economic benefits derived from the acquired entities that are not individually identified and separately recognised. Goodwill, which is not amortised, is only recognised when acquired for valuable consideration in a business combination. Each goodwill item is assigned to one or more Cash-Generating Units (CGUs) that are expected to benefit from the synergies arising from the business combinations. These CGUs are the smallest identifiable group of assets which, as a result of their continuous operation, generate cash flows for the Group, separately from other assets or groups of assets. CGUs, or groups of CGUs, to which goodwill has been assigned are tested at least once a year for impairment, or whenever there is evidence that impairment might have occurred. To that end, the Group calculates their value in use using mainly the distributed profit discount method, in which the following parameters are taken into account:

| – | Key business assumptions: these assumptions are used as a basis for the cash flow projections considered in the                                                                                                                                        
 valuation. For businesses engaging in financial activities, projections are made for variables such as changes in lending volumes, default rates, customer deposits, interest rates under a forecast macroeconomic scenario, and capital requirements. |

| – | Estimates of macroeconomic variables and other financial parameters. |

A-131

As confidentially submitted to the Securities and Exchange Commission on August 11, 2025. This Amendment No. 4 has not been publicly filed with the Securities and Exchange Commission and all information herein remains strictly confidential.

| – | Projection period: this is usually five years, after which a recurring level is attained in terms of both income and 
 profitability. These projections take into account the existing economic situation at the time of the valuation.     |

| – | Discount rate (post-tax): the present value of future dividends, from which a                                                                                                                                                              
 value in use is obtained, is calculated using the Institution’s cost of capital (Ke), from the standpoint of a market participant, as a discount rate. To determine the cost of capital, the Capital Asset Pricing Model (CAPM) is used in 
 accordance with the formula: “Ke = Rf + b (Pm) +                                                                                                                                                                                           
 a”, where: Ke = Required return or cost of capital, Rf = Risk-free rate, b = Company’s systemic risk coefficient, Pm = Market