Consolidated financial statement 2011 - Aquafin

Those provisions have particular application on the
following investments, which were activated under BE
GAAP:
• all of the investments in (supramunicipal) sewer and
treatment infrastructure, both completed investment
projects and investment projects in progress;
• hydronaut studies, completed and in progress;
• office buildings, purchased or acquired via financial
lease;
• computer and office equipment, furnishings, etc.;
for a total amount of €2,346,306 k.
Under BE GAAP, those investments were activated at the
acquisition value minus accumulated write-offs. Under IFRS,
no tangible fixed assets are recognised.
(1) Interpretation IFRIC 12 - Service Concession Agreements
as ratified on 25 May 2009 by the European Commission,
applies to Aquafin. After all:
The agreement is a 'public-to-private concession'.
In view of the legal framework of the management
agreement between Aquafin and the Flemish Region, one
could say that Aquafin is an extension of the government
from an economic perspective. That leads to the question
of whether there really is a 'public-to-private concession'.
At first glance, one would expect a private organisation
to be fully independent of the government (grantor).
Nevertheless, there could be circumstances in which an
entity that is totally or partly state property has a certain
degree of autonomy to carry out its activities, which is
the case with Aquafin.
The IFRIC has determined (in the basis for conclusion) that
if a concession agreement such as the one between
Aquafin NV and the Flemish Region is identical in all other
respects to a concession agreement between a (purely)
private organisation and the government, the operator
(in casu Aquafin) can be treated as if it were a private entity.
IFRIC 12 can therefore be applied.
The service concession agreement
The most important characteristic of services based on a
service concession agreement 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 must be provided by the
operator to the public (in the broad sense of the term)
within a pre-determined policy.
The management agreement sets out the services
between Aquafin and the government contractually
and determines which ´public´ services are to be delivered,
to wit, the expansion and the management of the
household wastewater treatment infrastructure.
Aquafin is responsible for at least part of the management
of the infrastructure and associated services and does not
operate solely as an agent on behalf of the Flemish Region.
In that respect, we report that Aquafin does, indeed, run an
operational risk, although a limited one, for example when it
fails to achieve the planned delivery of infrastructure work.
Furthermore, the management agreement states in Article
48 how payment is to be done (i.e. an invoicing agreement
between Aquafin and the user, especially the Flemish
drinking water companies) and, implicitly, also the price
that Aquafin may charge.
And finally, at the end of the concession agreement,
the complete infrastructure will be turned over to the
government at no charge. That means that Aquafin
does not, in fact, 'control' the infrastructure as the IFRS
understands 'control' and cannot sell or pledge it.
The expected economic life of the assets is longer than
the life of the concession.
Lease agreements in which the group acts as lessor
The project at Kapellen to carry out transport services is
included under BE GAAP as part of the tangible fixed assets.
Nevertheless, the Group does receive compensation via AWW
for making those assets available. From that perspective,
the group is a lessor in accordance with IAS 17 Leasing.
Consequently, those assets are presented as a receivable on
the group's balance (€6,824 k).
2. Receivables on the management agreement (long and
short term)
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.
After all, in exchange for the performance in the context of
the concession agreement, the group has an unconditional
contractual right as an operator and is contractually
compensated by the grantor (the Flemish Region).
Consolidated financial statement
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