annual-and-sustainability-report-2014

Notes to the consolidated accountsSee also Note 47 to the consolidated accounts, Financial instruments percategory and related effects on income.Assets held for saleAccording to IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations,an entity should classify an asset as held for sale if its carrying amount will berecovered principally through a sale transaction rather than through continuinguse. For that to be the case, certain criteria must be fulfilled. The asset must beavailable for immediate sale in its present condition subject to usual and customaryterms. Further, the sale must be highly probable. The last-mentioned criterionmeans that a plan for the disposal must have been prepared and approved at theappropriate level of management, an active program for the disposal must havebeen initiated, and the asset must be marketed for sale at a price that is reasonablein relation to its current fair value. In addition, the sale should be expected tobe completed within one year from the date of classification.See also Note 39 to the consolidated accounts, Assets held for sale.Determining control and influence over companies owned by Vattenfall ABA subsidiary is defined as a company that is controlled by the Vattenfall Group.A subsidiary is controlled by Vattenfall when Vattenfall has influence over theinvestment, is exposed to or is entitled to a variable return from its involvement inthe investment, and can exercise its influence over the investment in order toaffect its return. Most of Vattenfall’s subsidiaries are 100%-owned and are therebyconsidered to be controlled by the Vattenfall Group. In those cases whereVattenfall owns less than 100% of the investment, an individual assessment ismade to determine if Vattenfall has control or not and if the criteria for classificationas a subsidiary are met in general. The adoption of IFRS 10 – ConsolidatedFinancial Statements starting in 2014 had not entailed any change in whichcompanies are consolidated as subsidiaries. Note 26 provides an account of largecompanies that are recognised as subsidiaries.Joint arrangements classified as a joint operation are arrangements over whichtwo or more parties have control and have rights to the assets and obligationsfor the liabilities relating to the arrangement. Through adoption of IFRS 11 – JointArrangements in 2014, starting in 2014 Vattenfall’s ownership in the Krümmelnuclear power plant in Germany, which was previously reported as an associatedcompany in accordance with the equity method, should be reported as a jointoperation, entailing recognition of Vattenfall’s share of assets and liabilities heldor incurred jointly, revenue from the sale of the output of the joint operation, andVattenfall’s share of expenses incurred from the joint operation.Joint arrangements classified as a joint venture are arrangements over whichtwo or more parties have joint control and have rights to the net assets of theinvestment. Vattenfall’s investments in V2 Plug-In Hybrid Vehicle Partnership HBand NordzeeWind C.V. are reported as joint ventures. The adoption of IFRS 11 –Joint Arrangements has not entailed any material change in which companies arereported as joint ventures.Associated companies are companies over which the Vattenfall Group hassignificant influence, but not control or joint control with other owners over theiroperational and financial management, usually through holdings of between 20%and 50% of the number of votes.Note 5 Acquired and divested operationsFair valueAcquired operations 2014 2013Intangible assets: non-current — 51Trade receivables and other receivables 1 1Cash and cash equivalents 35 —Deferred tax liabilities — -11Trade payables and other liabilities -35 —Total net assets 1 41Acquisition of non-controlling interests 9 —Total purchase consideration= Cash flow for the year 10 41Carrying amountDivested operations 2014 2013Intangible assets: non-current 20 —Property, plant and equipment 5,902 3Participations in associated companies and jointventures 2 97Deferred tax assets 91 —Other non-current assets 2,269 57Inventories 79 —Trade receivables and other receivables 1,087 31Cash and cash equivalents 513 16Provisions -1,312 —Deferred tax liabilities -361 —Trade payables and other liabilities -1,707 -7Total net assets 6,583 197Proceeds from sales/Cash flow for the year 8,875 271Net of proceeds received in previous years andprovision for price adjustments 706 —Capital gain/loss recognised in the incomestatement 2,998 74Divestments in 2014Divestments in 2014 consist mainly of the sale of the majority interest of 74.9%in the electricity grid company Stromnetz Hamburg GmbH, the sale of the 85.5%majority shareholding in Müllverwertung Borsigstraße GmbH, a waste incinerationplant in Hamburg, and the divestment of the minority shareholding in the Polishenergy company Enea S.A.Divestments in 2013Divestments in 2013 consist of the associated companies EHA Energie HandelsGesellschaft mbH & Co. KG and Preem Gas AB, three smaller subsidiaries, andholdings of other shares and participations.Note 6 Exchange ratesKey exchange rates applied in the accounts of the Vattenfall Group:Average rate Balance sheet date rateCurrency 2014 2013 31 Dec.2014 31 Dec.2013EuroCountries EUR 9.1004 8.6625 9.3930 8.8591Denmark DKK 1.2207 1.1615 1.2616 1.1877Norway NOK 1.0848 1.1081 1.0388 1.0593Poland PLN 2.1715 2.0615 2.1981 2.1325UK GBP 11.3091 10.2250 12.0593 10.6262USA USD 6.8837 6.5144 7.7366 6.4238Note 7 Net sales2014 2013Sale of goods (electricity, heat, gas, etc.) 171,022 179,307Rendering of services 10,207 7,473Excise taxes (included in the above) -15,284 -14,527Net sales 165,945 172,253Vattenfall did not have transactions in 2014 or 2013 with a single external customerwhere revenues amounted to more than 10% of the Group’s total net sales.Acquisitions/investments in associated companies and other shares andparticipations amounted to SEK -222 million (-15). See Notes 27, Participationin associated companies and joint arrangements and 28, Other shares andparticipations to the consolidated accounts.92 Vattenfall Annual and sustainability report 2014