The main impacts of recognition in the income statement of lease contracts as lessor, in accordance with IFRS 16, are as follows:
(in millions of euros) | 2020 | 2019 |
|---|---|---|
| Income from subleases | Income from subleases 2020 56 | Income from subleases 2019 73 |
| Variable lease expenses | Variable lease expenses 2020 (46) | Variable lease expenses 2019 (45) |
| Expenses on short-term leases or leases of low-value assets | Expenses on short-term leases or leases of low-value assets 2020 (106) | Expenses on short-term leases or leases of low-value assets 2019 (167) |
| Income from sale and leaseback operations | Income from sale and leaseback operations 2020 - | Income from sale and leaseback operations 2019 - |
Operating profit before depreciation and amortisation | Operating profit before depreciation and amortisation 2020 (96) | Operating profit before depreciation and amortisation 2019 (139) |
| Depreciation on right-of-use assets | Depreciation on right-of-use assets 2020 (697) | Depreciation on right-of-use assets 2019 (660) |
Operating profit | Operating profit 2020 (793) | Operating profit 2019 (799) |
| Interest expense on the lease liability | Interest expense on the lease liability 2020 (80) | Interest expense on the lease liability 2019 (85) |
Income before taxes of consolidated companies | Income before taxes of consolidated companies 2020 (873) | Income before taxes of consolidated companies 2019 (884) |
(in millions of euros) | 2020 | 2019 |
|---|---|---|
TOTAL PAYMENTS RELATING TO THE LEASE LIABILITY | TOTAL PAYMENTS RELATING TO THE LEASE LIABILITY 2020 (795) | TOTAL PAYMENTS RELATING TO THE LEASE LIABILITY 2019 (790) |
Payments relating to the lease liability mainly concern principal repayments, and amount to €719 million in 2020 (€721 million in 2019).
The accounting treatment of public and private agreements depends on the nature of the agreements and their specific contractual features.
In France, the Group is the operator for three types of concessions:
Hydropower concessions follow standard rules approved by decree. For concessions granted before 1999, hydropower concession assets consist solely of hydropower generation equipment (dams, pipes, turbines, etc.), while for more recent concessions, they also include hydropower generation equipment and switching facilities (alternators, etc.).
Most concessions that expired before 2012 were initially for 75 years and were renewed for terms of 30 to 50 years. However, the French government has not yet renewed 18 concessions that have expired. Since their expiry these concessions have thus been in the “rolling extension” situation defined by the law, which stipulates that at the expiry date of a concession, if no new concession has been established “the concession is extended on the existing terms until such time as a new concession is granted”, so as to ensure continuity of operations in the meantime (Article L. 521-16 par. 3 of the FrenchEnergy Code).
As these concession agreements are not concerned by IFRIC 12 “Service concession agreements”, the assets used, whether directly owned or part of the concession, are recorded under “Property, plant and equipment operated under concessions other than French public electricity distribution concessions”at acquisition cost.
The main depreciation periods applied are:
Heat generation and distribution concession agreements signed by Dalkia with public authorities confer the right to operate facilities remitted by or constructed at the request of those authorities for a limited period, under the concession-granting authority’s supervision.
These agreements set the terms for remuneration and transfer of the facilities to the concession-granting authority or another operator taking over at the end of the agreement.
The assets are recorded as “Other intangible assets”, in accordance withIFRIC 12 “Service concession agreements”.
Concession assets generally comprise:
Intangible assets are depreciated on a straight-line basis over the term of the concession, which is generally between 15 and 25 years.
Almost all of these assets are located in France.
Foreign concessions are governed by a range of contracts and national laws.Most assets operated under foreign concessions are recorded under “Property, plant and equipment operated under concessions other than French public electricity distribution concessions”. Foreign concessions essentially concernEdison in Italy, which operates local gas distribution networks, hydropower generating plants and energy services under concessions. Edison owns all the assets except for some items of property, plant and equipment on the hydropower generation sites, which will be returned to the concession-granting authority for nil consideration or with an indemnity when the concession ends.In compliance with IFRIC 12, certain concession agreements are recorded as intangible assets.
Hydropower generation assets which will be returned for nil consideration at the end of the concession are depreciated over the duration of the concession.
