Sales essentially comprise income from energy sales (to final customers and as part of trading activities), and sales of services. EDF’s energy sales revenues include delivery services through the energy distribution network purchased from the subsidiary Enedis and reinvoiced to end-customers.
Sales are recognised when delivery of goods has taken place or the service has been completed.
The quantities of energy delivered to EDF customers but not yet measured and billed at the end of the period are calculated based on the quantities used by the sites of the EDF balance-responsible entity less the quantities billed, after losses measured by a statistical method presented to the Commission de régulation de l’énergie (CRE), the French Energy Regulation Commission. These quantities are valued using an average price determined by reference to energy invoiced in the previous month.
Sales of goods and services not completed at the balance sheet date are valued by reference to the stage of completion at that date.
Sales of energy to EDF Trading, the EDF group’s trading company, are recorded at their contractually stipulated amount.
A capacity mechanism has been set up in France to ensure secure power supplies during peak periods.
French law 2010-1488 of 7 December 2010 on the new organisation of the electricity market introduced an obligation in France to contribute to power supply security from 1 January 2017.
Operators of electricity generation facilities and load-shedding operators must have their capacities certified by RTE, and commit to a forecast level of availability for a given year of delivery. In return, they are awarded capacity certificates. Meanwhile, electricity suppliers and purchasers of power to compensate for network losses (obligated actors) must have capacity certificates equivalent to consumption by their customers in peak periods. Suppliers pass on the cost of the capacity mechanism to final customers through their sale prices.
The system is completed by registers for trading of capacities between actors.
Capacity auctions are held several times a year.
EDF is concerned by both aspects of this system, as an operator of electricity plants and as an electricity supplier.
The operations are recorded as follows:
Research expenses are recognised as expenses in the financial period incurred.
Development costs that meet the requirements for capitalisation laid down inArticle 211-5 of the French national chart of accounts are included in intangibleassets and amortised on a straight-line basis over their foreseeable useful life.
Other intangible assets mainly consist of software and storage capacity reservation costs.
Royalties paid for SaaS (Software as a Service) are generally charged to expenses as the services are provided. To qualify as intangible assets, SaaS contracts must confera right of control to the user in addition to access to the software for a fixed period.
Intangible assets other than research and development expenses are amortised on a straight-line basis over their useful lives regardless of whether they are generated in-house or purchased.
EDF’s property, plant and equipment is reported under two balance sheet headings, as appropriate to the business and contractual circumstances of the assets’ use:
Property, plant and equipment is recorded at acquisition or production cost:
When some of the decommissioning costs for a plant are to be borne by a partner, the expected reimbursement is recognised as accrued income in the assets. The difference between the provision and the accrued income is recorded in Property, plant and equipment, and subsequent payments by the partner are deducted from the accrued income.
EDF capitalises safety expenses incurred as a result of legal and regulatory obligations sanctioning non-compliance by an administrative ban from operation.
Strategic safety spare parts for generation facilities are treated as property, plant and equipment, and depreciated over the residual useful life of the installations.
The costs of work done during major inspections that are necessary for continued operation by generation assets are capitalised and amortised over a period corresponding to the time elapsing between two inspections.
When a part of an asset has a different useful life from the overall asset’s useful life, it is identified as an asset component and depreciated over a specific period.
Borrowing costs attributable to the financing of an asset incurred during the construction period are recognised as expenses.
