Page 37 - KELAG Annual Report 2017
P. 37

considered. However, the synergies specific to the asset can be considered in the measurement
                                      of fair value.

                                      If there are no reliable forecasts for a longer period, the calculation is generally based on a detailed
                                      planning phase of five years. If certain planning assumptions (e.g., forecasts of electricity prices)
                                      are available for a longer period of time, these are used as inputs for the calculation. No material
                                      changes in the assumptions used were evident by the time the financial statements were finalised.

                                      Trends in the price of electricity are usually a reflection of key estimate assumptions. If they are
                                      relevant to the economic appraisal of individual CGUs, they are calculated as follows to determine
                                      the recoverable amount:

                                      For recoverable amounts from wind and hydroelectric power calculated on the basis of the value
                                      in use, price forecasts based on an electricity price forecast model are used. The price structure at
                                      the beginning of the planning period (2018 to 2021) is determined using the listed price for
                                      energy forwards or concluded agreements; the price levels are then matched to the forecasts of
                                      energy prices (using linear interpolation) in the period up to 2024. For the 2024 to 2040 forecast
                                      period, the price structure is determined using an electricity price forecast model for the energy
                                      industry to prepare medium and long-term electricity price scenarios. A sustainable price increase
                                      at a rate of 2.0% is assumed for the extrapolation of the forecast electricity prices (from 2041
                                      onwards). In cases where the respective public authorities have guaranteed feed-in tariffs, these
                                      were used for the relevant period. For the recoverable amounts from heating projects, the forecast
                                      price developments of the energy sources serve as a price structure to calculate the recoverable
                                      amount. By means of indexing, they are also used to adjust the heat sales prices under the terms
                                      of the contract.

                                      The price structure to calculate fair value less costs to sell is the same as in the aforementioned
                                      procedure, although costs to sell are subject to a discount.

                                      The discount rate is derived from the risk-free interest rate plus a risk mark-up for borrowed capital
                                      (calculated based on current long-term refinancing costs) and the market risk, taking into account
                                      the beta factor.

                                      The risk-free interest rate is derived from the interest rates paid on German government bonds
                                      with matching terms using the Svensson method. For heat, wind power and hydroelectric power
                                      business divisions in Austria, a matching interest rate of 1.34% (prior year: 1.04%) for a period of
                                      30 years was used and for the remaining business divisions, a rate of 0.87% (prior year: 0.62%) for
                                      a period of 15 years. As a rule, the matching interest rate was determined on the basis of the
                                      typical average capital employed of a cash-generating unit.

                                      The market risk premium was fixed uniformly at 7.00% (prior year: 7.00%).
   32   33   34   35   36   37   38   39   40   41   42