Boskalis_Annual_Report_2016

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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. 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. 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 ANNUAL REPORT 2016 – BOSKALIS FINANCIAL STATEMENTS 2016 PROPERTY, PLANT AND EQUIPMENT STRATEGIC INVESTMENTS

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. 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 NON-CURRENT RECEIVABLES