Wiener Stadtwerke Annual Report 2012

Accounting and valuation principles
1. general principles
The financial statements of all consolidated companies have
been prepared on the basis of uniform accounting and
valuation principles.
The consolidated financial statements have been prepared in
accordance with the principles of correct accounting and
valuation, and in compliance with general accounting standards,
with the aim of providing a true and fair presentation of
the assets, financial and earnings positions of the Group. The
consolidated profit and loss account has been prepared on the
basis of the nature-of-expense method. These consolidated
financial statements have been prepared in accordance with
the principle of completeness.
The assets and liabilities of consolidated subsidiaries
recognised in the Group financial statements have been
uniformly valued, in line with Article 260 of the Austrian
Commercial Code, on the basis of the valuation methods
applied to the consolidated financial statements of the parent
company. The principles of individual valuation and a going
concern have been applied to the valuation of individual assets
and liabilities.
The principle of accounting prudence has been applied,
particularly in that only gains realised on or before the balance
sheet date are reported as such. All identifiable risks and
impending losses existing or incurred either during the 2012
financial year or in earlier periods have been taken into
account.
2. Fixed assets
2.1. Intangible assets and tangible assets
Intangible and tangible assets are recognised at their cost of
acquisition or manufacture and, where subject to depreciation
or amortisation, are depreciated or amortised applying the
straight line method based on standard commercial useful
lives. Low-value items with acquisition costs below EUR 400.00
are depreciated fully in the year of their acquisition.
The amortisation of goodwill is linear and takes account of the
commercial useful life of such assets.
Additions in the first half of any given financial period are
generally subject to full-year depreciation in the year of their
acquisition, while those acquired in the second half of any
given financial period are subject to half-year depreciation in
the first year.
In the case of those subsidiaries affected by a change in their
balance sheet date, depreciation and amortisation for a
three-month period have been reported in the figures for their
respective short fiscal years.
Unforeseen declines in asset value have been taken into
account by means of impairment charges.
Category
intangible assets
Useful life
(years)
Licences, industrial property rights, etc.
2 - 40 or
contractual term
Electricity supply rights, energy use rights 30 - 50
Goodwill 5 - 15
Software
Division-specific tangible assets
3 - 5
Major construction projects (e.g. tunnels, concrete
channels, etc.)
40 - 80
Energy supply equipment 15 - 25
Supply networks (e.g. power lines, mains, etc.) 5 - 50
Telecommunication networks 10 - 30
Vehicles (e.g. trams, buses, etc.) 10 - 30
Other tangible assets
Production and office buildings 10 - 100
Other technical equipment 2 - 30
Fixtures, furniture and office furniture 2 - 30
Own work capitalised is calculated on the basis of the specific
costs of manufacture in addition to an appropriate proportion
of the production-related material and manufacturing overheads
plus a similar proportion of occupational pension and
voluntary social costs incurred by the Company. Interest
payable on borrowings for the purposes of financing the
manufacture of assets is not generally capitalised.
Investment grants are recognised as accrued liabilities and are
reversed in line with the depreciation of the relevant assets in
connection with which they were granted.
2.2. Financial assets
shares in affiliated companies, in as far as these are not
consolidated, in addition to other shareholdings, are carried at
their cost of acquisition less any impairment charges.
shares in associated companies are recognised at valuations
based on the equity method. This method applies the same
valuation methods as applied to fully consolidated companies.
Lendings are carried at the lower of their acquisition costs or
cash value on the balance sheet date.
non-current financial assets are recognised applying the
moderate lower of cost or market principle. Impairment
charges are recognised when these are assumed not to be
temporary in nature.
The revised opinion issued in June 2010 by the Austrian
Financial Reporting and Auditing Committee (AFRAC) entails
significant changes to the valuation of investment funds in the
form of a fund of funds and recognised as non-current financial
assets. In accordance with the resulting deviation from the
modified lower of cost or market principle and the valuation of
these financial assets more closely on the basis of fair values
(strict lower of cost or market principle), there followed during
the course of the 2010/2011 financial year a far-reaching
restructuring of the Wiener Stadtwerke investment fund in the
interests of establishing an even more conservative portfolio
Notes to the Consolidated Financial Statements | Annual Report 2012
47