Page 29 - KELAG Annual Report 2017
P. 29

The Group offers “Altersteilzeit” (special phased retirement scheme) models that give employees
                                      the  option  to  avail  themselves of  a  subsidised  model  before  reaching  the  age  for  a  pension
                                      entitlement under the ASVG with continued payment of their remuneration until they reach the
                                      statutory retirement age. The phased retirement model provides for a block model according to
                                      which the beneficiary works full time for the first 40% of the period from the commencement of
                                      phased  retirement  and  is  fully  exempted  for  the  remaining  60%  of  the  period.  The  agreed
                                      remuneration amount during the phased retirement period is 70% of the monthly remuneration
                                      before commencement of phased retirement.

                                      In accordance with IAS 19, the projected unit credit method is used to measure the provision
                                      reported in the statement of financial position, and the remeasurement gain/loss is recognised
                                      immediately through profit or loss. The measurement parameters correspond essentially to those
                                      used for obligations similar to pension obligations. The expenses to be recorded as a result are
                                      largely reported in the income statement under salaries.

                                      Other provisions are recognised in accordance with the regulations in IAS 37 if the company has
                                      a legal or constructive obligation to a third party based on a past event and it is probable that this
                                      obligation will lead to an outflow of resources. It must be possible to make a reliable estimate of
                                      the amount of the obligation. Provisions are stated at the amount needed to settle the obligation
                                      and are not netted against any rights to reimbursement. The settlement amount is calculated
                                      based on the best estimate of the amount with which a present obligation could be settled or
                                      transferred to a third party on the reporting date. Future cost increases that are foreseeable and
                                      probable as of the reporting date are taken into account.

                                      Provisions for potential losses from onerous contracts are also recognised in KELAG’s consolidated
                                      financial statements in accordance with the requirements of IAS 37. The carrying amount reflects
                                      the amount of the expected unavoidable outflow of resources at full cost. This is the lower amount
                                      of  the  cost  of  fulfilling  the  agreement  and  any  compensation  payments  if  it  is  not  fulfilled.
                                      However,  recognising  impairment  losses  on  assets  associated  with  onerous  contracts  has
                                      precedence over recognising provisions for potential losses.

                                      Non-current provisions are discounted if the present value of the expected settlement amount
                                      differs significantly from its nominal value. As a rule, the provisions due to be settled in more than
                                      12 months are discounted in accordance with the Group’s accounting and measurement rules.
                                      The discount rate is a pre-tax rate adjusted to the debt-specific risks. The amounts from unwinding
                                      the discount are recognised as an interest expense; any effects from interest rate changes are
                                      disclosed under the operating result.

                                      Trade payables and other liabilities are measured at amortised cost.
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