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position as ‘due from customers for work in progress’ and as
liabilities as ‘due to customers’.
Salvage work that is completed at the statement of financial
position date but for which the final proceeds are not yet
determined between parties is recognized at expected
proceeds taking into account the estimation uncertainty less
progress billings and advances. For expected losses on
salvage work, provisions are recognized as soon as they are
foreseen.
TRADE AND OTHER RECEIVABLES
3.13
Trade and other receivables are stated initially at fair value
and subsequently at amortized cost less accumulated
impairment losses, such as doubtful debts. Amortized cost is
determined using the original effective interest rate.
CASH AND CASH EQUIVALENTS
3.14
Cash and cash equivalents consist of cash and bank balances,
deposits with terms of no more than three months or that
qualify as highly liquid investments that are readily convertible
and which are subject to insignificant risks of change in value.
The explanatory notes disclose the extent to which cash and
cash equivalents are not freely available as a result of transfer
restrictions, joint control or other legal restrictions. Bank
overdrafts are included as a component of cash and cash
equivalents for the purpose of the consolidated statement of
cash flows.
SHARE CAPITAL
3.15
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares are
recognized as a deduction from equity, net of any tax effects.
Transaction costs directly attributable to share buy backs are
recognized as a deduction from equity, net of any tax effects.
INTEREST-BEARING BORROWINGS
3.16
Interest-bearing borrowings are liabilities to financial
institutions. At initial recognition, interest-bearing borrowings
are stated at fair value less transaction costs. Subsequently,
interest-bearing borrowings are stated at amortized cost with
any difference between cost and redemption value being
recognized in the statement of profit or loss over the period of
the borrowings using the original effective interest rate.
EMPLOYEE BENEFITS
3.17
Defined contribution pension plans
A defined contribution pension plan is a post-employment
benefit scheme under which the Group pays fixed
contributions into a separate pension fund or an insurance
company. The Group has no legal or constructive obligation to
pay further amounts if the pension fund or insurance company
has insufficient funds to pay employee benefits in connection
with services rendered by the employee in the current period
or prior periods. Obligations for contributions to defined
contribution pension plans are recognized as an employee
benefit expense as part of the personnel expenses in the
statement of profit or loss when they are owed. Prepaid
contributions are recognized as an asset. Contributions to a
defined contribution pension plan payable more than 12
months after the period during which the employee rendered
the services, are discounted.
Defined benefit pension plans
A defined benefit pension plan is every post-employment
benefit plan other than a defined contribution plan. For each
separate defined benefit pension plan, the net asset or liability
is determined as the balance of the discounted value of the
future payments to employees and former employees, less the
fair value of plan assets. The calculations are done by
qualified actuaries using the projected unit credit method. The
discount rate equals the yield on high-quality corporate bonds
as at the date of the statement of financial position, with the
period to maturity of the bonds approximating the duration of
the liability. If the calculation results in a positive balance for
the group, the asset is included up to an amount equal to any
unrecognized past service pension costs and the discounted
value of economic benefits in the form of possible future
refunds or lower future pension premiums from the fund. In
calculating the discounted value of economic benefits, the
lowest possible financing obligations are taken into account as
applicable to the individual plans in force within the Group.
An economic benefit is receivable by the Group if it can be
realized within the period to maturity of the plan or upon
settlement of the scheme’s obligations. Actuarial gains and
losses, including any movements in limits on net pension
assets, are recognized in the unrecognized results within the
statement of other comprehensive income. If plan benefits are
changed or if a plan is amended, past service costs or a
resulting curtailment profit or loss is recognized directly in the
statement of profit or loss. The Group recognizes profit or
losses on the settlement of defined benefit plans at the time of
settlement.
Short-term employee benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed when the related
service is provided.
A liability is recognized for the amount expected to be paid
under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay
this amount as a result of past services provided by the
employee, and the obligation can be estimated reliably.
Other long-term employee benefits
Other long-term employee benefits mainly consist of jubilee
benefits. The calculation of these liabilities is executed
according to the ‘projected unit credit’ method, using the
actuarial assumptions for the predominant defined benefit
plan.
Share-based remuneration plans
Members of the Board of Management and some senior
employees participate in a bonus plan that is based on the
development of the share price, whereby the bonus is
distributed in cash. The fair value of the amount payable over
the year is recognized as personnel expenses in the statement
of profit or loss, with a corresponding increase in liabilities.
The liability is remeasured each reporting date and at
settlement date. Any changes in the fair value of the liability
are recognized as personnel expenses in the statement of
profit or loss.
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ANNUAL REPORT 2016 – BOSKALIS