Boskalis_Annual_Report_2016

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LEASE PAYMENTS 3.25 Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the lease liability. FINANCE INCOME AND COSTS 3.26 Finance income comprises interest received and receivable from third parties, currency gains on financing and compensating results of negative changes in the fair value of financial instruments used to hedge interest or currency results on the financing concerned (hedged item), for which the results of the hedged item are included in the finance income. Interest income is recognized in the statement of profit or loss as it accrues, using the effective interest rate method. Finance expenses include interest paid and payable to third parties which are reported using the effective interest method, expenses resulting from early repayments, arrangement fees, currency losses on financing and results of positive changes in fair value of financial instruments used to hedge interest or currency results on the financing concerned (hedged item), for which the results of the hedged item are included in the finance expenses. The interest component of financial lease payments is recognized in the statement of profit or loss using the effective interest rate method. Borrowing costs not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in the statement of profit or loss. TAXATION / DEFERRED INCOME TAX ASSETS AND 3.28 LIABILITIES Taxation is calculated on the basis of the result before taxation for the reporting period, taking into account the applicable tax provisions and tax rates, and also includes adjustments on taxation from prior reporting periods and movements in deferred taxes recognized in the reporting period. Taxation is included in the statement of profit or loss unless it relates to items recognized directly in equity, in which case taxation is included in equity. Income tax expenses also include the corporate income tax levied on deemed profit determined by revenue (withholding tax). Temporary differences are accounted for in deferred tax assets and/or deferred tax liabilities. Deferred tax assets are only recognized to the extent that it is probable that taxable profit will be available for realization in the foreseeable future. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax assets and liabilities are offset if there is a legally enforceable right to do so, and if they relate to SHARE IN RESULT OF JOINT VENTURES AND 3.27 ASSOCIATED COMPANIES Share in result of joint ventures and associated companies comprises the share in the results after taxation of the strategic investments (see note 3.2.3).

income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but provided there is an intention to settle the tax liabilities and assets on a net basis or the tax assets and liabilities will be realized simultaneously. Deferred income tax assets and liabilities are recognized at nominal value. Additional (income) taxes that arise from the distribution of dividend are recognized at the same time that the liability to pay the related dividend is recognized. EARNINGS PER SHARE 3.29 The Group discloses earnings per ordinary share as well as diluted earnings per ordinary share. Earnings per ordinary share is calculated based on the result attributable to the Group’s shareholders divided by the calculated 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 average number of issued ordinary shares are adjusted for all potentially diluting effects on ordinary shares. DIVIDEND 3.30 Dividends are recognized as a liability in the period in which they are declared. DETERMINATION OF FAIR VALUE 3.31 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. Financial assets available for sale The fair value of the financial assets available for sale is determined by quoted prices. Strategic investments Where relevant, the fair value of strategic investments 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.

ANNUAL REPORT 2016 – BOSKALIS