Page 21 - Annual Report KELAG Group 2018

recognised as derivatives pursuant to IFRS 9 are excluded from the requirements of IFRS 15. These
are only treated as revenue pursuant to IFRS 15 if they are physically fulfilled (i.e., if the own use
exemption is exercised).

Aside from the requirement to make further disclosures on revenue in the notes, implementing
IFRS 15 in the KELAG Group had a negligible effect. This is primarily due to the fact that an analysis
of the agreements for electricity, gas and heating and of the rendering of grid and energy services
has shown that in each case revenue recognition under IFRS 15 will be in line with revenue
recognition patterns under IAS 18, either as a collective of performance obligations from a series
of similar (supply) obligations or as a stand-ready obligation. In this connection, the KELAG Group
applies the practical expedient of IFRS 15.B16, thereby recognising revenue based on the invoiced
amount, provided that the pertinent requirements are met. In the course of the implementation
of IFRS 15, the issues of gross or net presentation, especially in connection with the principal-
agent topic, were examined, along with the existence of contracts with several performance
obligations. With regard to the principal-agent topic, it was found that the previous method
pursuant to IAS 18 corresponds to the requirements of IFRS 15. The analysis also showed that
contracts with customers containing several performance obligations resulting in different timing
for revenue currently only play an insignificant role in the KELAG Group.

One amendment in the KELAG Group made because of IFRS 15 is a new presentation of
connection cost contributions from the heating business, which used to be reported under other
liabilities and are now uniformly presented with other contract liabilities under construction cost
subsidies, which previously mainly contained construction cost subsidies from the electricity and
gas segments. This resulted in a EUR 16.6m increase in the construction cost subsidies item in the
statement of financial position as of 1 January 2018, from EUR 84.1m to EUR 100.7m; the
statement of financial position item other liabilities fell by the same amount from EUR 46.2m to
EUR 29.6m. As this reclassification was not cash-effective, it was corrected in the statement of cash
flows.