Annual Report 2008 Sustainable design & engineering - Grontmij

Notes to the consolidated financial statements
Equity accounted investees
All joint ventures and associates are recognised initially at cost and are measured based on the ‘equity’ method.
From the moment the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including
any receivables) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has a legal obligation
to settle the losses.
Employee benefits
Pension schemes
The Group has granted pension rights in the form of defined contribution plans and defined benefit plans.
Defined contribution plans
A defined contribution plan is a plan relating to employee benefits after retirement for which the Group pays contributions to the entity that
administers the concerning plan, and for which no legal or constructive obligation exists to pay any further contributions.
Obligations for contributions to defined contribution pension plans are recognised as personnel expenses in profit or loss when they are due.
Defined benefit plans
Defined benefit plans concern all post-employment plans, other than defined contribution plans. The Group’s net obligation in respect of defined
benefit pension plans is calculated separately for each plan; these calculations are performed by qualified actuaries in accordance with the
‘projected unit credit’ method.
For this calculation the amount of future benefits that employees have earned in return for their services in the current and prior periods are
estimated. These benefits are discounted to determine their present value, and any unrecognised past service costs and the fair value of the plan
assets are deducted.
The discount rate used is the yield on the balance sheet date for high quality corporate bonds whose maturity is approaching the terms of the
Group’s liabilities. The fair value of the plan’s assets is subsequently deducted.
When the calculation results in a benefit for the Group, the recognised asset is limited to the total of any unrecognised actuarial losses and
past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan. An economic benefit is available to the Group if it is realizable during the life of the plan, or on settlement of the plan
liabilities.
Actuarial gains and losses that arise are recognised in the income statement over the expected average remaining working lives of the employees
participating in the plan, to the extent that any cumulative unrecognised actuarial gains or losses exceed 10% of the greater of the present value
of the defined benefit obligation and the fair value of plan assets. Otherwise the actuarial gain or loss is not recognised.
Pension expenses are accounted for under personnel expenses.
Improvement, reducement or settlement of pension plans
When the pension rights arising from a plan are improved, the portion of the increased pension rights pertaining to the employees’ period of
service that has expired is recognised linearly as expenditure in the income statement over the average period until such time as the pension
rights become vested.
Where the entitlements vest directly, the expenditure is recognised directly in the income statement.
When the pension rights arising from a scheme have been reduced or settled, the profit or loss arising from the curtailment or settlement is
recognised in the income statement at the moment the curtailment or settlement occurs. In the case of a partial curtailment, a pro rata portion
of the previously unrecorded pension costs for expired periods of service and unrecognised actuarial profits and losses are accounted for in the
income statement.
Other long-term employee benefits
Other long-term employee benefits are measured at the actuarial present value of the liability. The discount rate used is the yield on the balance
sheet date for high level corporate bonds whose maturity is approaching the terms of the Group’s liabilities. Any actuarial gains and losses are
recognised in the income statement in the period in which they arise.
Share based payments
The fair value of value-dependent variable remuneration that has been granted to the Executive Board is accrued over the period to the moment
an unconditional right on payment has been vested. The valuation of the accrual is reviewed on every reporting date.
82
GRONTMIJ | ANNUAL REPORT 2008