EirGrid plc Annual Report 2011

EirGrid plc Annual Report & Accounts 2011
2. Statement of Accounting Policies
(continued)
Historically, changes in useful lives have not
resulted in material changes to the Group’s
depreciation charge.
• Revenue
Connection fee revenue from the Gate 3 project
is based on an estimate of the project completed,
being the proportion of costs incurred for work
performed on the project to date relative to the
estimated total costs of the project. Revenue
related to the Gate 3 project recognised during
the year to 30 September 2011 totalled €1.6m
(2010: €2.7m).
• Retirement benefits obligations
The Group operates two defined benefit pension
plans. The actuarial valuation of the pension
plan liabilities are based on various financial
and demographic assumptions about the future
including discount rates, inflation, salary
increases, pension increases and mortality rates.
The Group’s obligation in respect of the plans are
calculated by independent qualified actuaries
and are updated at least annually. The obligation
at 30 September 2011 is €75.0m (2010: €74.2m)
and the fair value of plan assets is €60.5m
(2010: €53.8m). A net pension asset arising on
the SONI Focus plan of €1.3m (2010: €nil) is not
recognised as it is not certain that a refund will
be available from the plan, nor will the
netpension asset result in a reduction to future
contributions. This gives a net pension deficit
of €15.7m (2010: €20.4m).
• Deferred tax
Deferred tax assets are recognised to the extent
that it is probable that future taxable profit will
be available against which any unused tax losses
and unused tax credits can be utilised.
The Group estimates the most probable amount
of future taxable profits, using assumptions
consistent with those employed in impairment
calculations. These calculations require the
use of estimates. The net deferred tax asset at
30 September 2011 was €6.4m
(2010: net deferred tax asset of €5.6m).
• Intangible assets
The Group tests annually whether its goodwill
and licence agreement assets have suffered
any impairment. The recoverable amount of the
intangible assets allocated to a CGU has been
determined by value in use calculations, which
use budgets and forecasts covering the period
to 30 September 2017. These calculations require
the use of estimates and assumptions, which are
discussed in detail in note 10. Intangible assets
at 30 September 2011 were €17.3m (2010:
€21.1m).
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