Boskalis_Annual Report_2017

82

82

losses on the settlement of defined benefit plans at the time of settlement.

Provisions for reorganization costs are recognized when the Group has a detailed formal plan for the restructuring and has announced its main features to those affected by it at the date of the statement of financial position or when the execution of the plan has commenced. Provisions for warranties are recognized based on the best estimate of the expected cash outflows or cost of repair to settle contractually agreed warranties during the defect notification period for completed projects. The carrying amount of these provisions is estimated based on common industry practice and the Group’s experience with warranty claims for relevant projects. A provision for onerous contracts, including contracts for rendering services to customers, is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. In accordance with the Group’s policy and applicable legal requirements, a provision for site restoration in respect of contaminated land, and the related expenses, is recognized if the land is contaminated. TRADE AND OTHER PAYABLES 3.19 Trade and other payables are recognized initially at fair value and subsequently at (amortized) cost. If the difference between the discounted and nominal value is not material, trade and other payables are stated at cost. is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets are generally measured at the lower of their carrying amount and fair value less costs to sell. Liabilities related to the assets held for sale are separately recognized as liabilities held for sale. Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated. REVENUE 3.21 Revenue from the contracting of projects by the Dredging & Inland Infra and Offshore Energy operational segments, excluding sea transport and other related services, mainly consists of the cost price of the work performed during the reporting period, plus a part of the expected result upon completion of the project in proportion to the progress made during the reporting period, and including and/or less the provisions recognized and/ or used and released during the reporting period for expected losses. The applied ‘percentage- of-completion’ method is, by nature, based on an estimation process for the allocation of revenue over the duration of the contract. Revenue from additional work is included in the overall contract revenue if the customer has accepted the sum involved. Claims and incentives are recognized if they are virtually certain based on negotiations with the customer. Liquidated damages are recognized, lowering revenues, if the Group expects that the client is entitled to these liquidated damages and will deduct these from contract revenue. ASSETS HELD FOR SALE 3.20 Assets are classified as held for sale (disposal group) when it

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. 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. EU-IFRS expenses regarding the remuneration of the Board of Management include the amounts paid, payable and accrued for annual salaries and remuneration, pension plans, short- term and long-term variable remunerations and other reimbursements. Up to and including 2016 pension expenses were based on actuarially determined service costs and as of 2017, following a change in the pension scheme, pension expenses are based on pension premiums paid or due. The short-term and long-term variable remuneration expenses of the Board of Management, based on EU-IFRS, include the charge that relates to the short-term variable part for targets for the reporting year and the charge for the long-term variable part for targets that, until the actual payment is determined by the Remuneration Committee, are based on the assumption that the performance of the Board of Management is on target. This charge also includes any changes to the amounts accrued in previous years. PROVISIONS 3.18 Provisions are determined on the basis of estimates of future outflows of economic benefits relating to operational activities for legal or constructive obligations of an uncertain size or with an uncertain settlement date that arise from past events and for which a reliable estimate can be made. Provisions are discounted insofar as the difference between the discounted value and nominal value is material. Provisions, if applicable, relate amongst other things, to reorganizations, warranties, onerous contracts, soil contamination, legal proceedings and received claims.

ANNUAL REPORT 2017 – BOSKALIS FINANCIAL STATEMENTS 2017 ANNUAL REPORT 2017 -- BOSKALIS FINANCIAL STATEMENTS 2017