Page 109 - KELAG Annual Report 2019
P. 109

Public investment subsidies are offset against the corresponding cost.

           The  construction  cost  subsidies  recognised  in  the  statement  of  financial  position  are  those
           received from customers for the grid business and connection costs to the electricity and gas grid
           as well as other connection cost contributions from the heat segment, which are classified as
           contract liabilities pursuant to IFRS 15. These are reported as a liability and released through profit
           or loss over a period of 20 years. The amounts released are reported in revenue.

           If grid user charges are set by a regulator on the basis of cost or earnings estimates and lower or
           higher costs or earnings in the past are considered during the future rate setting procedure, the
           grid operator is entitled to raise its charges to recover additional costs or lower earnings from the
           grid users by raising its charges and is required to reduce its charges to reimburse users for lower
           costs  or  earnings  increases  by  setting  lower  user  charges  in  future  years.  Such  claims  or
           obligations are referred to as regulatory assets or liabilities.

           In the grid business, the KELAG Group is subject to a regulated tariff regime; E-Control Austria (the
           government regulator for electricity and natural gas markets) acts as the regulatory authority in
           Austria.

           Neither regulatory assets nor regulatory liabilities are recognised in these consolidated financial
           statements as the recognition of such assets and liabilities is inappropriate pursuant to the current
           applicable interpretation of IFRSs.

           Energy certificates in  the KELAG  Group  primarily  relate  to green certificates. These  qualify  as
           grants related to income and, pursuant to IAS 20.7, are recognised when there is assurance that
           the company will comply with the conditions attached to them and the grants will be received. In
           this event, the certificates and allowances are recorded at fair value in the KELAG Group.


           Measuring certificates at fair value means that the certificates are presented under inventories
           upon  acquisition  of the  legal  right  (generally  when  electricity is  produced in certified  power
           plants).  Income  from  the  allocation  of  certificates  and  allowances  is  reported  under  other
           operating income. If necessary, subsequent measurement is at the lower net realisable value.
           Income from the sale of green certificates is included under revenue.

           The income tax expense reported in the income statement for the past financial year comprises
           the income tax calculated from the taxable income and the applicable tax rate for the individual
           entities as well as the change in deferred tax liabilities and assets.


           With a group and tax equalisation agreement dated 7 December 2004, KELAG formed a tax group
           pursuant to Sec. 9 KStG (Austrian Corporate Income Tax Act) as a member with KEH as the group
           parent. Since 2005, several new members from the Group have been added to this tax group. The
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