Page 20 - Annual Report KELAG Group 2018
P. 20

The table above shows that the application of IFRS 9 only caused insignificant changes in the
           KELAG Group.

           For other interests in other entities, the introduction of IFRS 9 was used to check the accounting
           treatment  of  the  interests  contained  in  this  item.  As  a  result  of  this  analysis,  investments
           accounted for using the equity method previously carried at amortised cost on the grounds of
           immateriality were subsequently measured at equity, instead of measuring them at fair value. To
           this end, there was a reclassification of EUR 0.6m from interests in other entities to investments
           accounted for using the equity method and also a corresponding adjustment entry to group
           equity  totalling  EUR 1.5m  as  of  1 January  2018.  Following  these  adjustments,  interests  in
           investments accounted for using the equity method came to EUR 163.4m as of 1 January 2018
           instead of the previous amount of EUR 161.3m.
           The model for recognising loss allowances in accordance with IFRS 9 requires that impairment
           losses be based on the expected credit losses and not only on the incurred credit losses as was
           previously the case under IAS 39. Within the KELAG Group, trade receivables, securities, bank
           balances  and  term  deposits  are  the  items  particularly  affected  by  the  new  impairment
           requirements. However, the associated calculations for 1 January 2018 and 31 December 2018
           revealed that the new impairment rule has no significant impact in the KELAG Group. This is
           largely thanks to strict receivables and risk management, as a result of which the Group mainly
           conducts business with counterparties with investment grade ratings, i.e., a good credit standing
           and low credit risk, as well as the fact that business-related bad debts tend to be immaterial.

           The hedge relationship in place as of 31 December 2017 (KRV cash flow hedge) was rolled forward
           in compliance with the transition requirements as of 1 January 2018.

           In addition to the new requirements for recognising financial assets, IFRS 9 contains minimal
           changes for recognising financial liabilities. These amendments did not have any impact on the
           KELAG Group.

           From financial year 2018, IFRS 15 “Revenue from Contracts with Customers” replaces IAS 11, IAS
           18, IFRIC 13, IFRIC 15, IFRIC 18 and SIC 31. This new standard on revenue recognition provides a
           five-step model to recognise revenue. Firstly, the contract(s) with customers and thereafter the
           separate performance obligations  is/are identified in order to then determine the transaction
           price and allocate it to the contractual obligations in subsequent steps. In the fifth step, revenue
           is recognised when an entity satisfies a performance obligation, i.e., either at a point in time or
           over time. IFRS 15 was applied in the KELAG Group for the first time as of 1 January 2018, making
           use of the modified retrospective method specified in the transition requirements for first-time
           application. The comparative prior-year figures were not adjusted.

           Revenue in the KELAG Group is mostly generated from the following areas: sale of electricity, gas
           and heat as well as the rendering of grid and energy services. A large portion of contracts in the
           KELAG Group relate to own use contracts (contracts that IFRS 9.2.4 defines as being excluded from
           the scope of IFRS 9) and therefore fall within the scope of IFRS 15. In general, contracts that are
   15   16   17   18   19   20   21   22   23   24   25