Consolidated financial statement 2011 - Aquafin

More documents

Recommendations

Info

30 Consolidated financial statement 2011 The early retirement scheme is also processed as a defined benefit plan inasmuch as the group has an actual liability with respect to the employees concerned. The group acknowledges a provision on the balance that is calculated in accordance with the ‘projected unit credit method’. n Estimates and assumptions To execute its (supramunicipal) contracts, Aquafin NV entered into a management agreement with the Flemish Region. The management agreement sets out the tasks of Aquafin NV and the payments that the company will receive for those tasks. The elements from that management agreement, which have been set out below, are crucial to the further assessment of the accounts. • All of the reasonable costs that Aquafin NV makes in the context of the supramunicipal sanitation of household wastewater are paid by the Flemish Region through the drinking water companies. • The management agreement has a rolling nature, which means that it is automatically extended every year unless one of the parties has terminated the agreement. The notice period for termination is 20 years. • During the execution of the management agreement, Aquafin NV has the right of use and enjoyment of the infrastructure created, purchased or leased by the company. At the end of the management agreement – after the settlement of all remaining payments due – the ownership of that infrastructure will be transferred to the Flemish Region at no charge. • During the execution of the management agreement, the construction and operations risks are borne by Aquafin NV. The interpretation IFRIC 12 - Service Concession Agreements applies to public-private agreements if the following conditions are satisfied: • the party that grants the concession ('grantor') controls or regulates the services that the operator is required to provide with the infrastructure, whom those services are to be delivered to, and the price; • the grantor controls the ultimate right through ownership. In other words, the grantor has control over the significant residual value in the infrastructure at the end of the life of the agreement. The most important characteristic of the aforementioned interpretation is the nature of the services. The activities of the operator must be of ´public utility´ (the so-called 'public service obligation'). The services related to the infrastructure are provided by Aquafin to the public (in the broad sense of the term) within a pre-determined policy, i.e. the management agreement. This determines which 'public' services are to be provided, to wit, the expansion and management of the supramunicipal infrastructure for treating household wastewater. Infrastructure assets within the scope of the agreement are assets built or acquired for use within the context of the concession agreement or existing infrastructure to which the operator has been granted access. All of the infrastructure built, purchased or leased by Aquafin NV in the context of the management agreement with the Flemish Region falls within the scope of this interpretation. As a result, the infrastructure concerned is not treated as tangible fixed assets in the financial statement of the company. PRINCIPLES FOR THE ITEMS OF THE BALANCE STATEMENT n n Intangible assets Research and development Expenditures on research activities are recognized in the results for the period in which they were incurred. Lease agreements a. The group as lessee The group has entered into several operational lease agreements. They therefore do not include a transfer of the actual risks and rewards of ownership. In the event of operational leases, the lease payments are shown as costs and are distributed linearly over the lease period. b. The group as lessor Lease agreements in which the group acts as lessor are classified as financial leases if the group transfers substantially all of the risks and rewards of ownership of an asset to the lessee. The group will include a claim in the balance statement that is equal to the net investment in the lease.
n Financial assets n Debts a. Receivables in the context of the concession agreement In the context of the application of IFRIC 12, the group applies the "financial asset model". That applies when the operator has an unconditional right to actively receive cash or other financial asset from the grantor. In exchange for the services performed under the concession agreement, the group has an unconditional right as an operator and is contractually – within the context of the management agreement – remunerated by the grantor (the Flemish Region). The group will consider this financial asset as a receivable in the category of "Loans and receivables". It is valued at the amortized cost price, which is calculated based on the so-called effective interest method. The consequences of the specific context in which the group carries out its activities and the fact that the group is not allowed to charge interest compensation are that the calculation of the effective interest rate has no impact. b. Trade receivables and other receivables These financial assets are valued at the amortized cost price in accordance with IAS39 §46 (a) – at fair value increased by any transaction costs when first booked. The valuation of the fixed income securities follows the same rules. The uncollectable receivables are written off against the relevant provision account at each balance sheet date. The additions to and recoveries from this account are both reported in the profit and loss account. c. Funds and cash equivalents Funds consist of cash and demand deposits. Cash equivalents are short-term, extremely liquid investments that can be converted immediately into a known amount of cash and that do not have an inherent material risk of change of value. d. Financial assets available for sale Financial assets available for sale are the non-derived financial assets that are designated as being available for sale or that are not classified as (a) loans and receivables, (b) investments retained until the end of the maturity period, or (c) financial assets valued at fair value with the changes in value being shown in the profit and loss account. They are valued at the fair value in the balance statement, with the changes in value being incorporated in the unrealised results. n a. Financial debts When first included in the balance statement, financial liabilities are valued at fair value, increased by the transaction costs that are directly attributable to the issue of the financial liability. After the first inclusion, those financial liabilities are valued at the amortized cost price, with the effective interest methodology being used. b. Commercial debt and other short-term debts Commercial debt and other short-term debt are valued at the amortized cost price. Provisions Provisions are shown in the balance statement if: • the group has a present liability (legal or constructive) as a result of a past event; • it is probable that an outflow of resources embodying economic benefits will be required to settle the liability; • a reliable estimate can be made of the amount of the liability. In other words, provisions are shown if they are probable and if there is a current liability on the date that the balance is prepared. Provisional assets are not shown in the balance statement but are shown in the explanations if an inflow of economic rewards is probable. Provisional liabilities are not shown on the balance statement but are shown in the explanations unless the chance of a loss is negligible. The burden that is associated with a provision is shown in the profit and loss account. The group shows the certain payments (from the Flemish Region or the insurance company) as an asset. If the impact due to discounting of the future cash outflows required is material, the provisions are updated annually based on the generally used discounting rate that expresses the time value of money that applies on the balance date. Consolidated financial statement 31
Page 1: Green light for clear water Annex t
Page 4 and 5: 2 Consolidated financial statement
Page 80: Aquafin develops and implements eff

Consolidated financial statement 2011 - Aquafin

Create successful ePaper yourself

Delete template?

Save as template?