2011 Annual Report - OTCIQ.com

96 Notes
(5) Revenues
Revenues are generally recognized upon delivery of goods to
customers or purchasers, or upon completion of services rendered.
Delivery is considered to have occurred when the risks
and rewards associated with ownership have been transferred
to the buyer, compensation has been contractually established
and collection of the resulting receivable is probable.
Revenues are generated primarily from the sale of electricity and
gas to industrial and commercial customers, to retail customers
and to wholesale markets. Additional revenue is earned
from the distribution of gas and electricity, from deliveries of
steam, heat and water, as well as from proprietary trading.
(6) Own Work Capitalized
Own work capitalized amounted to €519 million in 2011
(2010: €588 million) and resulted primarily from engineering
services in networks and in connection with new construction
projects.
(7) Other Operating Income and Expenses
The table below provides details of other operating income
for the periods indicated:
Other Operating Income
€ in millions 2011 2010
Income from exchange rate differences 6,027 5,177
Gain on derivative financial instruments 4,559 6,046
Gain on disposal of investments
Gain on disposal of property,
1,416 3,424
plant and equipment 132 54
Miscellaneous 1,651 1,260
Total 13,785 15,961
Revenues from the sale of electricity and gas to industrial and
commercial customers, to retail customers and to wholesale
markets are recognized when earned on the basis of a contractual
arrangement with the customer or purchaser; they reflect
the value of the volume supplied, including an estimated value
of the volume supplied to customers between the date of
their last meter reading and period-end. Unrealized and realized
proceeds from proprietary trading activities are recognized
net in revenues.
At €113 billion, revenues in 2011 were 22 percent higher than in
the previous year. The increase is primarily the result of higher
trading volumes at our Trading unit.
The classification of revenues by segment is presented in
Note 33.
In general, E.ON employs derivatives to hedge commodity
risks as well as currency and interest risks.
Gains and losses on derivative financial instruments relate to
gains from fair value measurement and to realized gains
from derivatives under IAS 39, with the exception of income
effects from interest rate derivatives. In this respect there
was a significant impact from commodity derivatives in particular,
which in 2011 resulted predominantly from the marking
to market of gas, oil and emissions-related derivatives. In 2010
there were effects resulting especially from coal, oil and gasrelated
derivatives.
Income from exchange rate differences consisted primarily of
realized gains from currency derivatives in the amount of
€3,042 million (2010: €3,420 million) and of effects from foreign
currency translation on the balance sheet date in the amount
of €2,353 million (2010: €1,480 million).