SOMFY_ANNUAL_FINANCIAL_REPORT_2017
07 CONSOLIDATED FINANCIAL STATEMENTS
Property, plant and equipment under finance leases Note 5.3.2
The mandatory application of IFRS 16 – Leases as from 1 January 2019, and the challenges that the standard poses to the Group are detailed in note 1.4.2. The Group did not opt for the early application of IFRS 16 in its 2017 consolidated financial statements. Leases that transfer virtually all the risks and rewards incident to ownership to the lessee are classified as finance leases . These leases are classified as finance leases when the following major indicators are met (non-cumulative criteria and non-exhaustive list): transfer of asset ownership at expiry of the lease with – purchase option; the option exercise conditions are such as to make the transfer – of ownership highly likely at the expiration of the lease; the lease term is for the major part of the useful life of the – asset according to the lessee’s conditions of use; the present value of minimum lease payments is close to the – fair value of the leased asset at the conclusion of the contract.
Assets financed within the framework of finance leases primarily include real estate. They are recorded, from inception of the contract, in property, plant and equipment at the lower of the fair value of leased assets and the present value of minimum payments in respect of the lease. Payments made in respect of the lease are broken down between finance charges and debt repayment, in order to obtain a constant periodic rate of interest on the outstanding liability. Finance charges are directly recognised in the income statement. PPE acquired through finance leases are depreciated over the same periods as described above where the Group expects to gain ownership of the asset at the expiry of the contract. If not, the asset is depreciated on the basis of the shorter period of the asset useful life and the duration of the lease. Leases classified as operating leases are not restated and lease payments are recognised as expenses for the financial year, spread if required on a straight-line basis.
Land
Buildings
Plant, machinery and tools
Total
€ thousands
40,062
Gross value at 31 December 2017
7,979
32,045
38 60
60
Acquisitions
– – – –
– – – –
–22
Disposals
–22
1 –
Changes in foreign exchange rates Changes in scope of consolidation
1 – –
–13,465 26,636 –13,077
Other movements
–868 7,111
–12,597 19,448 –13,049
AT 31 DECEMBER 2017
77
Accumulated depreciation at 1 January 2017
– – – – – – –
–28
–648
Depreciation charge for the period
–639
–9 18
18
Disposals
– – –
– –
Changes in foreign exchange rates Changes in scope of consolidation
– – –
4,769
Other movements
4,769
AT 31 DECEMBER 2017
–8,919 10,529
–19
–8,938 17,698
NET VALUE AT 31 DECEMBER 2017
7,111
58
Other movements include the exercise of options upon expiry of certain finance leases.
The maturity profile of non-discounted and discounted minimum payments on finance leases is as follows:
Undiscounted 2016 debt
Discounted 2016 debt
Undiscounted 2017 debt
Discounted 2017 debt
€ thousands 1 year or less
€ thousands 1 year or less
2,236 4,350 2,974 9,560
1,930 3,486 2,598 8,014
1,444 3,621 2,329 7,394
1,175 2,879 2,094 6,148
Between 1 and 5 years
Between 1 and 5 years
5 years or more
5 years or more
TOTAL
TOTAL
93
SOMFY – ANNUAL FINANCIAL REPORT 2017
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