Page 35 - KELAG Annual Report 2017

invoiceable partial delivery has been provided to the customer. The recognition of revenue from
the retail and business customer segment, which is generally invoiced once a year, is based on a
deferral in the statement of financial position and simulation of volumes which have been
delivered but for which no meter reading is available yet. Revenue is recognised net of any sales
deductions and VAT as well as after elimination of intercompany transactions.

Earnings from derivative contracts in energy trade whose primary purpose is not a physical
delivery of energy, but the management of an energy trade item, are recognised as revenue. The
underlying revenue and incidental purchasing costs are offset against each other and presented
in net terms in revenue.

Preparation of the consolidated financial statements in accordance with IFRSs requires
judgements in the application of accounting policies. In addition, assumptions must be made by
management about future developments that can materially affect the recognition and value of
assets and liabilities, the disclosure of other obligations as of the reporting date and the
presentation of income and expenses during the financial year.

The following section provides a description of material judgements exercised and assumptions
made regarding future developments on which these IFRS consolidated financial statements are
based.

If an equity investment is less than 20%, the company assumes that it has no significant influence
unless this influence can be clearly demonstrated.

For KELAG, it is an indisputable certainty that significant influence in accordance with IAS 28.6 is
established by the granting of a contractually guaranteed dilution and squeeze-out protection
clause and the joint realisation of significant capacity increases in the area of power plants as well
as the provision of significant technical information and the appointment of a member of the
Supervisory Board and the related participation in decision-making processes.

As of every reporting date, KELAG assesses the need to include immaterial subsidiaries and equity
investments in the consolidated financial statements on the basis of quantitative and qualitative
criteria.