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Expenditure on research activities, undertaken with the
prospect of gaining new scientific or technical knowledge and
understanding, is expensed as incurred.
PROPERTY, PLANT AND EQUIPMENT
3.7
Property, plant and equipment are stated at cost less
accumulated depreciation calculated from the date of
commissioning and accumulated impairment losses. The cost
price is based on the purchase price and/or the internally
generated cost based on directly attributable expenses. The
depreciation, taking into account an assumed residual value,
is calculated over the estimated remaining useful lives
assigned to the various categories of assets. Modifications and
capacity enhancing investments are also capitalized at cost
and amortized over the remaining life of the asset. Property,
plant and equipment under construction are included in the
Statement of Financial Position on the basis of instalments
paid, including interest during construction. In the event that
property, plant and equipment consists of components with
different useful lives, such components are accounted for as
separate items.
Buildings are depreciated over periods ranging from 10 to
30 years. The depreciation periods for components of the
majority of the floating and other construction materials range
from 5 to 30 years. Furniture and other fixed assets are
depreciated over a period between 3 and 10 years. Land is
not depreciated. The wear of dredging equipment is highly
dependent on unpredictable project-specific combinations of
soil conditions, material to be processed, maritime
circumstances, and the intensity of the deployment of the
equipment. As a result of these erratic and time-independent
patterns, the maintenance and repair expenses to keep the
assets in their operational condition are charged to the
Statement of Profit or Loss.
Methods for determining depreciation, useful life and residual
value are reassessed at the end of each financial year and
amended if necessary.
Leases in terms of which the Group assumes substantially all
the risks and rewards of ownership are classified as finance
leases. Upon initial recognition, the leased asset is classified
as a tangible fixed asset and is measured at an amount equal
to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition,
the asset is accounted for in accordance with the accounting
policy applicable to that asset.
Other leases are operating leases which are not recognized in
the Group’s consolidated statement of financial position and
are disclosed as part of the other commitments and contingent
liabilities.
STRATEGIC INVESTMENTS
3.8
Strategic investments are initially recognized at cost including
the goodwill determined at acquisition date. Subsequently
strategic investments are accounted for using the equity
method, adjusted for differences with the accounting principles
of the Group, less any accumulated impairment losses. If the
Group’s share of losses exceeds the carrying amount of the
strategic investments, the carrying amount is reduced to zero
and the recognition of further losses is discontinued except to
the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the strategic
investments.
NON-CURRENT RECEIVABLES
3.9
Non-current receivables are held on a long-term basis and/or
until maturity and are carried at amortized cost. Accumulated
impairment losses are deducted from the carrying amount.
FINANCIAL INSTRUMENTS AVAILABLE FOR SALE
3.10
Financial instruments available for sale include equity
investments (certificates on shares) and are recognized initially
at fair value increased with transaction costs. After first
recognition, financial instruments available for sale are
subsequently measured at fair value with unrealized gains or
losses recognized in other comprehensive income.
At derecognition or reclassification to associated companies,
any cumulative unrealized result is recycled to and recognized
in the statement of profit or loss. In case of impairment, the
cumulative loss is reclassified from the other comprehensive
income to the statement of profit or loss.
INVENTORIES
3.11
Inventories, which mainly consist of fuel, auxiliary materials
and spare parts, are stated at the lower of cost and net
realizable value. Net realizable value is the estimated selling
price in the ordinary course of business, less the estimated
costs of disposal.
DUE FROM AND DUE TO CUSTOMERS
3.12
Due from and due to customers concerns the gross amount yet
to be charged which is expected to be received from
customers for contractual work performed up to the reporting
date (hereinafter: ‘work in progress’) and services rendered
(mainly salvage work). Work in progress is valued at cost of
the work performed, plus a part of the expected results upon
completion of the project in proportion to the progress made
and less progress billings, advances and, if applicable,
provisions for losses. Provisions are recognized for expected
losses on work in progress as soon as they are foreseen, and
deducted from the cost price; if necessary, any profits already
recognized are reversed. Revenue from additional work are
included in the overall contract revenue if the customer has
accepted the sum involved. Claims and incentives are
included in construction work in progress if they are virtually
certain based upon negotiations with the customer. The cost
price includes project costs, consisting of payroll costs,
materials, costs of subcontracted work, cost of local
representatives, rental charges and maintenance costs for the
equipment used and other project costs. The rates applied are
based on the expected average occupation in the long run.
The progress of a project is determined on the basis of the
proportion that contract cost incurred for work performed to
date bear to estimated total cost. Profits are not recognized
unless a reliable estimate can be made of the result upon
completion of the project. The balance of the value of work in
progress, progress billings and advance payments is
determined for each project. It is assessed for each project
whether the work in progress relates to an asset or a liability.
These assets are recognized in the statement of financial
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ANNUAL REPORT 2016 – BOSKALIS
FINANCIAL STATEMENTS 2016