International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards
Page 367
(France)
contract. Price
contract unless purchased
increases
before term by the grantor
subject to
on the basis of the
agreement by
economic value
grantor
VINCI Airports [extract]
ANA Group
Regulated air
Users,
Nil
Infrastructure returned to
2063
10 airports in
tariffs;
airlines
grantor for no
Portugal
unregulated
consideration at end of
non-air revenue
contract
Cambodia
Pricing law as
Users,
Nil
Infrastructure returned to
2040
Airports
defined in the
airlines
grantor for no
concession
consideration at end of
Phnom Penh,
contract. Price
contract
Siem Reap and
increases subject
Sihanoukville
to agreement by
airports
grantor
(Cambodia)
Service concession arrangements 1861
12.3
Commitments made under concession contracts – intangible asset model
Contractual investment, renewal or financing obligations
(in € millions)
31/12/2017
31/12/2016
ASF group
1,381
1,716
Cofiroute 882
985
Arcos – company holding the concession for the western
Strasbourg bypass
452
523
Société concessionaire Aéroports du Grand Ouest
(Scago) 366
366
Salvador de Bahia airport in Brazil
224
–
Lamsac 167
136
ANA Group
113
166
Aéroports de Lyon (ADL)
14
85
Other 42
19
Total 3,641
3,997
Contractual capital investment obligations for motorway companies (ASF group, Cofiroute) relate mainly to
undertakings as part of multi-year master plans and the motorway stimulus plan implemented in the second half of
2015.
Progress with works by VINCI Autoroutes companies in 2017 led to a €509 million reduction in their
commitments.
Scago’s investment commitments at 31 December 2017 related to the construction of a new airport at Notre Dame
des Landes (see Note N.32.2 “Concession for the Grand Ouest airport”).
The concession contract for Salvador de Bahia airport in Brazil includes renovation work on the existing airport
terminal and runways, totalling €224 million.
The above amounts do not include obligations relating to maintenance expenditure on infrastructure under
concession, for which provisions are set aside (see Note H.18.3 “Breakdown of current provisions”).
Collateral security connected with the financing of concessions
Some concession operating companies have given collateral security to guarantee the financing of their
investments in infrastructure under concession. These break down as follows:
(in € millions)
Amount Start
date End
date
Lamsac
705 2016 2037
Arcour 640
2008
2047
Aerodom 358
2016
2029
Aéroports de Lyon (ADL)
225
2016
2032
Other concession operating companies
11
In addition to the disclosures required by SIC-29, the disclosure requirements of
IFRS 15 will need to be considered. See Chapter 28 at 11. Vinci also disclosed the
revenue and profit earned from its concession arrangements. The following extract
discloses revenue from concessions as a component of revenue by business line. The
extract is not intended to show the disclosures required by IFRS 15.
1862 Chapter 26
Extract 26.5: VINCI SA (2017)
Notes to the consolidated financial statements [extract]
C.
Financial indicators by business line and geographical area [extract]
1.
Information by operating segment [extract]
1.2
Information relating to the Concessions business [extract]
2017
Concessions
VINCI
Highways and
VINCI
other
(in € millions)
VINCI Autoroutes
Airports
concessions Total
Income Statement
Revenue (*)
5,277
1,409
258
6,945
Concession subsidiaries’ works revenue
633
52
176
861
Total revenue
5,910
1,462
434
7,805
Operating income from ordinary activities
2,685
563
3
3,251
% of revenue (*)
50.9%
39.9%
1.2%
46.8%
Recurring operating income
2,676
589
6
3,270
Operating income
2,676
589
6
3,270
(*)
Excluding concession subsidiaries’ revenue derived from works carried out by non-Group companies.
References
1
IFRIC Update, September 2005.
10 IFRIC Update, September 2004.
2
IPSAS
32,
Service Concession Arrangements:
11 IFRIC Update, July 2016.
Grantor, International Public Sector Accounting
12 IFRIC Update, July 2016.
Standards Board, October 2011.
13 IASB Update, July 2013.
3
IFRIC Update, September 2005.
14 IFRIC Update, March 2016.
4
IFRIC Update, March 2016.
15 IFRIC Update, July 2016.
5
IFRIC Update, July 2016.
16 IFRIC Update, July 2016.
6
IFRIC Staff paper, March 2016, IFRIC 12 –
17 IFRIC Update, September 2006.
Service Concession Arrangements – Service
concession arrangements with leased
infrastructure, p.11.
7
IFRIC Update, September 2016, Interpretations
Committee’s agenda decision.
8
IFRIC Update, March 2006.
9 IAS 38 (2007), Intangible Assets, IASB, 2007
Bound Volume, para. 98 stated that ‘there is
rarely, if ever, persuasive evidence to support
an amortisation method for intangible assets
with finite useful lives that results in a lower
amount of accumulated amortisation than under
the straight-line method.’ This was removed by
Improvements to IFRSs, May 2008.
1863
&nbs
p; Chapter 27
Provisions,
contingent liabilities
and contingent assets
1 INTRODUCTION .......................................................................................... 1869
1.1
Background .......................................................................................................... 1869
1.2 Interpretations
related
to
the application of IAS 37 .................................... 1869
1.2.1
IFRIC 1 .................................................................................................. 1869
1.2.2 IFRIC
3
.................................................................................................. 1870
1.2.3 IFRIC
5
.................................................................................................. 1870
1.2.4 IFRIC
6
.................................................................................................
1870
1.2.5 IFRIC
21
................................................................................................
1870
1.3
Terms used in this chapter ............................................................................... 1870
2 OBJECTIVE AND SCOPE OF IAS 37 ............................................................. 1872
2.1
Objective .............................................................................................................. 1872
2.2
Scope of IAS 37 ................................................................................................... 1872
2.2.1
Items outside the scope of IAS 37 ................................................... 1873
2.2.1.A
Executory contracts, except where the
contract is onerous ........................................................ 1873
2.2.1.B
Items covered by another standard ........................... 1873
2.2.2
Provisions compared to other liabilities ........................................ 1876
2.2.3
Distinction between provisions and contingent liabilities ......... 1876
3 RECOGNITION ............................................................................................. 1877
3.1
Determining when a provision should be recognised ................................. 1877
3.1.1
‘An entity has a present obligation (legal or constructive)
as a result of a past event’ ................................................................. 1877
3.1.2
‘It is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation’ ..... 1881
1864 Chapter 27
3.1.3
‘A reliable estimate can be made of the amount of the
obligation’ ............................................................................................. 1881
3.2
Contingencies ...................................................................................................... 1882
3.2.1
Contingent liabilities .......................................................................... 1882
3.2.2 Contingent
assets
................................................................................
1883
3.2.2.A
Obligations contingent on the successful
recovery of a contingent asset .................................... 1884
3.2.3
How probability determines whether to recognise or
disclose ................................................................................................. 1885
3.3
Recognising an asset when recognising a provision .................................... 1885
4 MEASUREMENT .......................................................................................... 1886
4.1
Best estimate of provision ................................................................................. 1886
4.2
Dealing with risk and uncertainty in measuring a provision ...................... 1888
4.3
Discounting the estimated cash flows to a present value ........................... 1889
4.3.1
Real versus nominal rate ................................................................... 1889
4.3.2
Adjusting for risk and using a government bond rate ................. 1889
4.3.3
Own credit risk is not taken into account ..................................... 1892
4.3.4 Pre-tax
discount rate ......................................................................... 1892
4.3.5
Unwinding of the discount................................................................ 1893
4.3.6
The effect of changes in interest rates on the discount rate
applied .................................................................................................. 1895
4.4
Anticipating future events that may affect the estimate of cash
flows ...................................................................................................................... 1897
4.5
Provisions that will be settled in a currency other than the entity’s
functional currency ............................................................................................ 1897
4.6
Reimbursements, insurance and other recoveries from third parties ............ 1898
4.7
Joint and several liability ................................................................................... 1898
4.8
Provisions are not reduced for gains on disposal of related assets .......... 1899
4.9 Changes
and
uses of provisions ....................................................................... 1899
4.10 Changes in contingent liabilities recognised in a business
combination ........................................................................................................ 1900
5 CASES IN WHICH NO PROVISION SHOULD BE RECOGNISED ................... 1900
5.1
Future operating losses ..................................................................................... 1900
5.2
Repairs and maintenance of owned assets .................................................... 1901
5.3 Staff
training
costs
.............................................................................................
1902
5.4 Rate-regulated
activities
.................................................................................... 1903
6 SPECIFIC EXAMPLES OF PROVISIONS AND CONTINGENCIES .................. 1905
6.1
Restructuring provisions ................................................................................... 1905
6.1.1
Definition ............................................................................................. 1905
Provisions, contingent liabilities and contingent assets 1865
6.1.2
Recognition of a restructuring provision ...................................... 1906
6.1.3
Recognition of obligations a
rising from the sale of an
operation ............................................................................................. 1908
6.1.4
Costs that can (and cannot) be included in a restructuring
provision .............................................................................................. 1909
6.2
Onerous contracts ............................................................................................... 1911
6.2.1
Onerous leases .................................................................................... 1913
6.2.1.A
Recognition of provisions for vacant leasehold
property ........................................................................... 1913
6.2.1.B
Recognition of provisions for occupied
leasehold property ......................................................... 1915
6.2.1.C
When an entity ceases to occupy part of a
leased property ................................................................ 1917
6.2.2
Contracts with customers that are, or have become,
onerous .................................................................................................. 1917
6.3
Decommissioning provisions .......................................................................... 1920
6.3.1
Changes in estimated decommissioning costs (IFRIC 1) ............. 1921
6.3.2
Changes in legislation after construction of the asset ................. 1925
6.3.3
Funds established to meet an obligation (IFRIC 5) ...................... 1926
6.3.3.A
Accounting for an interest in a fund ........................... 1927
6.3.3.B
Accounting for obligations to make additional
contributions ................................................................... 1930
6.3.3.C
Gross presentation of interest in the fund and
the decommissioning liability ...................................... 1930
6.3.3.D Disclosure
of
interests arising from
decommissioning, restoration and
environmental rehabilitation funds ............................ 1930
6.3.4
Interaction of leases with asset retirement obligations .............. 1931
6.4