Boskalis_Annual_Report

FORMAT AND VALUATION

3.1

The consolidated financial statements are presented in euros,

the Group’s presentation currency. The consolidated financial

statements are based upon historical cost to the extent that

IFRS does not prescribe another accounting method for

specific items. Preparing financial statements means that

estimates and assumptions made by management partially

determine the amounts recognized under assets, liabilities,

revenue and costs. The estimates and assumptions are mainly

related to the measurement of intangible assets (including

goodwill), property, plant and equipment, joint ventures and

associated companies, expected results on the completion of

projects, pension liabilities, taxation, provisions and financial

instruments. Judgements made by management within the

application of IFRS which have a material effect on the

financial statements are the qualifications of investments as

Group companies, joint operations, joint ventures or

associated companies. Details are incorporated in the

explanatory notes to these items. Other than the elements

already explained in the explanatory notes to the financial

statements, no critical valuation judgements relating to the

application of the principles need further explanation. The

estimates made and the related assumptions are based on

management’s experience and understanding and the

development of external factors that can be considered

reasonable under the given circumstances. Estimates and

assumptions are subject to alterations as a result of changes in

facts and insights and may have different outcomes in different

reporting periods. Any differences are recognized in the

Statement of Financial Position, or the Statement of Profit or

Loss, or the Statement of Other Comprehensive Income,

depending on the nature of the item. Actual results may

deviate from results reported previously on the basis of

estimates and assumptions. Unless stated otherwise, all

amounts in the notes to these financial statements are stated in

thousands of euros.

CONSOLIDATION

3.2

The Group consolidates companies over which control is

exercised when the Group is exposed or has the right to

variable returns from its involvement with the investee and has

the ability to affect such returns. Subsidiaries are included in

the consolidation for 100%, taking into account any minority

share. For joint operations the Group accounts for its specific

rights and obligations. Strategic investments (i.e. joint ventures

and associated companies) are accounted for using the equity

method.

3.2.1 SUBSIDIARIES

Subsidiaries are included in the consolidation for 100% on the

basis of existing control, taking into account any minority

interests. The figures of subsidiaries are included in the

consolidated financial statements from the date that control

commences until the date that control ceases.

Control exists if the Group has:

the ability to direct relevant activities through its voting

power;

the right to variable returns from its involvement with the

investee; and

the ability to use its power to affect such returns.

In assessing whether the Group has acquired control, and

whether such control exists in the sense that it has power over

the investee, the Group takes into consideration voting rights,

or similar rights in an entity, potential voting rights that are

currently exercisable, and all other relevant facts and

circumstances.

If and when the Group loses control over a subsidiary, it

derecognizes the assets and liabilities of the subsidiary, any

non-controlling interests and any components of equity related

to the subsidiary. Any resulting gain or loss is recognized in

the statement of profit or loss. If the Group retains any stake in

the former subsidiary, then such interest is measured at fair

value at the date that control is lost.

3.2.2 JOINT OPERATIONS

If the Group has joint control over and is entitled to the rights

to the assets and is liable for the liabilities of the partnership,

the partnership is classified as a joint operation. Such a joint

control has been laid down in a contract and strategic

decisions on financial and operational policy are taken by

unanimous agreement. Joint operations mainly relate to project

driven construction consortiums.

Joint operations are included in the consolidated financial

statements on a pro rata basis in accordance with the

participation interest of the Group in the joint operation, also

referred to as proportionate consolidation.

3.2.3 JOINT VENTURES AND ASSOCIATED COMPANIES

The Group divides strategic investments into joint ventures and

associated companies based on the type and degree of

influence.

Joint ventures are those entities over which the Group has joint

control. Such joint control is laid down in a contract and

strategic decisions on financial and operational policy are

taken by unanimous agreement. The Group is only entitled to

the net assets of the joint ventures.

Shareholdings other than subsidiaries and joint ventures,

where there is significant influence on the financial and

operating policy, are recognized under associated

companies. Significant influence is presumed to exist when the

Group holds 20 percent or more of the voting power of

another entity.

The consolidated financial statements include the Group’s

share in the result of associated companies, after adjustments

to align the accounting policies with those of the Group, from

the date that significant influence commences until the date it

ceases to exist

(see note 3.8)

If the ownership in a joint venture or associated company is

reduced, but joint control or significant influence is retained,

dilution gains and losses arising from joint ventures and

associated companies are recognized in the statement of profit

or loss and only a proportionate share of the amount

previously recognized in the statement of other comprehensive

income is recycled to the consolidated statement of profit or

loss, where appropriate.

ANNUAL REPORT 2016 – BOSKALIS