ACS Group Annual Report - Grupo ACS

Consolidated
Financial Statements
Assets held under fi nance leases are recognised in the corresponding asset category at the current value of the minimum
payments to be made including their residual value, and are depreciated over their expected useful lives on the same basis
as owned assets or, where shorter, over the term of the relevant lease.
Leases are classifi ed as fi nance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classifi ed as operating leases.
Assets held under fi nance leases are depreciated on a basis similar to that of owned assets. If there is no reasonable certainty
that the lessee will ultimately obtain ownership of the asset upon the termination of the lease, the asset is depreciated over
the shorter of its useful life or the term of the lease.
Interest relating to the fi nancing of assets held under fi nance leases is charged to consolidated profi t for the year in
accordance with the effective interest method, on the basis of the repayment of the debt. All other interest costs are
recognised in profi t or loss in the year in which they are incurred.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the consolidated income statement.
The future costs that the Group will have to incur in respect of decommissioning, restoration and environmental rehabilitation
of certain facilities are capitalised to the cost of the asset, at present value, and the related provision is recognised. The
Group reviews each year its estimates of these future costs, adjusting the value of the provision recognised based on the
related studies.
3.04. Non-current assets in projects
This heading includes the amount of investments, mainly in transport, energy and environmental infrastructures which
are operated by ACS Group subsidiaries and which are fi nanced by the project fi nance method (limited recourse fi nancing
applied to projects).
These fi nancing structures are applied to projects capable in their own right of providing suffi cient guarantee to the
participating fi nancial institutions with regard to the repayment of the funds borrowed to fi nance them. Thus, each project is
performed through specifi c companies in which the project’s assets are fi nanced, on the one hand, through a contribution of
funds by the developers, which is limited to a determined amount, and on the other, generally of a larger amount, through
borrowed funds in the form of long-term debt. The debt servicing of these credit facilities or loans is mainly supported by
the cash fl ows generated by the project in the future, and also by real guarantees on the project assets.
Non-current assets in projects are valued at the costs directly allocable to construction incurred through their entry into
operation ( studies and designs, expropriations, reinstatement of services, project execution, project management and
administration expenses, installations and facilities and similar items), and the portion relating to other indirectly allocable
costs, to the extent that they relate to the construction period.
Also included in the cost are the borrowing costs accrued prior to the entry into operation of the assets arising from external
fi nancing used to acquire such assets. The capitalised borrowing costs relate to specifi c fi nancing expressly for the acquisition
of assets.
Repair and maintenance expenses which do not lead to a lengthening of the useful life of the assets or an extension of their
production capacity are expensed currently.
The residual value, useful life and method used to calculate the amortisation of the company’s assets are periodically
reviewed to assure that the amortisation method applied in consistent with the pattern of consumption of the benefi ts
arising from the use of the non-current assets in projects.
58
ANNUAL REPORT 2010
ACS GROUP