Boskalis_Annual_Report_2016

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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 to reorganizations, warranties, onerous contracts, soil contamination, legal proceedings and received claims. 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 ANNUAL REPORT 2016 – BOSKALIS FINANCIAL STATEMENTS 2016 ASSETS HELD FOR SALE 3.20 Assets are classified as held for sale (disposal group) when it

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. Revenue from salvage work that is completed at the date of the statement of financial position (part of the operational segment Towage & Salvage), but for which the proceeds are not finally determined between parties, is recognized at expected proceeds taking into account the estimation uncertainty. If it is uncertain whether the economic benefits of work done or services rendered will flow to the Group, the relevant revenue is not recognized. Revenue also includes revenue from services rendered to third parties during the reporting period. Such services include the rental/hire of equipment and/or personnel, sea transport services and related services of Offshore Energy and the activities of Harbor Towage. Revenues from services are recognized in the statement of profit or loss in proportion to the stage of completion of the work performed at the reporting date. The stage of completion is determined based on assessments of the work performed. RAW MATERIALS, CONSUMABLES, SERVICES AND 3.23 CONTRACTED WORK Raw materials, consumables, services and contracted work consist of the cost price of the work performed during the reporting period, excluding personnel expenses, amortization, depreciation and impairments. This item also includes equipment utilization costs, costs of operational leases, general overhead costs, external costs for research and development where not capitalized, currency translation differences, fair value changes of derivatives related to hedging foreign currency effects of projects, and other results/late results. PERSONNEL EXPENSES 3.24 Personnel expenses consist of wages and salaries for own personnel and the related social security charges and pension costs, including paid and accrued contributions for defined contribution pension plans and movements in assets and liabilities from defined benefit plans including curtailments and settlements, insofar as applicable, and excluding actuarial gains and losses and the limits on net pension plan assets added or charged directly to group equity. Revenue does not include any taxes on added value. OTHER INCOME AND OTHER EXPENSES 3.22 Other income and other expenses mainly consists of book results from disposals and insurance results.