Boskalis_Annual Report_2017

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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 interests. 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

it is leased for a period exceeding one year. This new standard relates to changes in accounting for operational lease commitments of the Group (see note 29). Including these leases in the Consolidated Balance Sheet would result in an increase of less than 2% of the Consolidated Balance Sheet total, amongst other effects. The standard was issued in January 2016 and will be effective as of 1 January 2019. The European Union endorsed the standard in October 2017.  IFRIC 23 ‘Uncertainty over Income Tax Treatments’ was issued in June 2017 and will be effective as of 1 January 2019. The interpretation as included in IFRIC 23 is to be applied to the determination of taxable profit (taxable loss), tax bases, unused tax losses, unused tax credits and tax rates, where there is uncertainty over income tax treatments under IAS 12. The European Union has not yet endorsed this interpretation. 3. PRINCIPLES OF FINANCIAL REPORTING The principles for financial reporting subsequently disclosed are applied consistently for all periods included in these consolidated financial statements and have been applied consistently by the Group companies. 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. FORMAT AND VALUATION

ANNUAL REPORT 2017 – BOSKALIS ANN L REP RT 2017 -- BOSKALIS

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