Annual Report of ACS Group - Grupo ACS

In an agency relationship, when the reporting company acts as a commission agent, the gross inflows of economic benefits for amounts collected on behalf of the
principal do not result in increases in equity for the company. Therefore, these inflows are not revenue and, instead, revenue is the amount of commissions.
Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
Dividend income from investments is recognised when the shareholder's rights to receive payment have been established.
Following is a disclosure of specific revenue recognition criteria for certain activities carried on by the Group.
3.16.01. Construction business
In the construction business, the outcome of a construction contract is recognised by the percentage of completion method, by reference to the stage of completion
of the contract work.
In the construction industry estimated revenues and costs of construction projects are susceptible to changes during the performance period which cannot be
readily foreseen or objectively quantified. In this connection, production each year is valued at certification price of the units completed in the period that, since they
are covered in the contract entered into with the owners, or in approved addenda or amendments thereto, do not give rise to any doubts regarding their certification.
In addition, production is valued at certification price of other project units that have already been completed for which management of the consolidated companies
consider there is reasonable assurance of recovery.
Should the amount of production from inception, valued at certification price, of each project be greater than the amount certified through the end of the reporting
period, the difference between the two amounts is recorded under "Trade and Other Receivables" on the asset side of the consolidated statement of financial position.
Should the amount of production from inception be lower than the amount of the certificates issued, the difference is recorded as "Customer Advances" under "Trade
and Other Payables” on the liability side of the consolidated statement of financial position.
Inspection fee expenses, estimated costs for site clearance and other expenses that may be incurred from completion of the project through final settlement thereof
are accrued over the execution period on the basis of production volumes and are recognised under “Current Provisions” on the liability side of the consolidated
statement of financial position.
Machinery or other fixed assets acquired for a specific project are depreciated over the estimated project execution period and on the basis of the consumption
pattern thereof. Permanent facilities are depreciated on a straight-line basis over the project execution period. The other assets are depreciated in accordance with
the general criteria indicated in these notes to the financial statements.
Late-payment interest arising in relation to delays in the collection of certification amounts is recognised when collected.
3.16.02. Industrial, environment and other service businesses
Group companies recognise as the outcome from the rendering of services for each year the difference between production (valued at the sale price of the services
provided during the period, which are covered by the initial contract entered into with the customer or in approved modifications or addenda thereto, and of services
which have not yet been approved but there is reasonable assurance of recovery) and the costs incurred in the year.
Price increases recognised in the initial contract entered into with the customer are recognised as revenue on an accrual basis, regardless of whether they have been
approved annually by it.
Late-payment interest is recognised as financial income when finally approved or collected.
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Economic and Financial Report
Consolidated Financial Statements