Boskalis Annual Report 2020

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could result in higher tax expenses and payments. With regard to these tax risks a liability is recognized if, as a result of a past event, Boskalis has an obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. EARNINGS PER SHARE The Group discloses earnings per ordinary share as well as diluted earnings per ordinary share. Earnings per ordinary share are calculated based on the result attributable to the Group’s shareholders divided by the calculated weighted average number of issued ordinary shares during the reporting period, taking into account any shares that have been issued or repurchased during the reporting period. In calculating the diluted earnings per share the result attributable to the Group’s shareholders and the weighted average number of issued ordinary shares are adjusted for all potentially diluting effects on ordinary shares. DIVIDEND Dividends are recognized as a liability in the period in which they are declared. DETERMINATION OF FAIR VALUE A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair value is determined for measurement and/or disclosure purposes based on the following methods: Intangible assets The fair value of other intangible assets recorded as a result of a business combination is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets. Joint ventures and associates Where relevant, the fair value of joint ventures and associates is determined or disclosed based on quoted prices or business valuations. Property, plant and equipment The fair value of property, plant and equipment recognized as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing wherein each party acted knowledgeably, prudently and without compulsion.

Trade and other receivables The fair value of trade and other receivables, other than due from customers, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

Share-based payment transactions The fair value is determined based on quoted prices.

Derivatives The fair value of derivatives is based on the estimated amount to be paid or received for a settlement of the contract as at the reporting date taking into account the actual interest rate and the credit rating of the counterparty. The fair value is based on broker quotes tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date. Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. Fair value hierarchy Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy as follows:  Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;  Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). CONSOLIDATED STATEMENT OF CASH FLOWS The consolidated statement of cash flows is drawn up using the indirect method. Cash is defined as cash and cash equivalents including bank overdrafts as presented in the explanatory notes to the cash and cash equivalents. Cash flows are presented separately in the statement of cash flows as cash flows from operating activities, investing activities and financing activities. The cash flows in the statement of cash flows also included the cash flows, if any, related to disposal groups.

ANNUAL REPORT 2020 – BOSKALIS A NUAL REPORT 2020 -- BOSKALIS