The value in use of listed securities in non-consolidated entities is based on stock market price.
For unlisted and listed securities in companies included in the EDF group consolidation, the value in use is determined by reference to the transaction value, equity value or net adjusted consolidated assets, taking into account expert valuation data and information that has become known since the previous year-end when necessary.
EDF holds investment securities comprising financial assets intended to finance operations at the end of the nuclear cycle, for which provisions have been accrued. These assets are managed separately from other financial assets and investments in view of their specific objective, and consist of bonds, equities, collective investment funds and “reserved” funds
Other investments also include treasury shares that cover obligations relating to debt instruments providing access to the Company’s capital, acquired under a liquidity contract with an investment services company or through an external growth operation or capital reduction.
Shares are recorded at acquisition cost. Transfer duties, professional fees, commissions, legal expenses and purchasing costs are all charged to expenses, applying the option used for other investments.
Investment securities (shares and bonds) are recorded at acquisition cost. If the carrying amount of a security is lower than the acquisition cost, the unrealised capital loss is fully covered by a provision without being netted against potential gains on other securities. The carrying amount of listed securities is assessed individually, taking the stock market price into account. For unlisted securities, the carrying amount is also assessed individually, mainly by reference to the growth prospects of the companies concerned and their share prices.
EDF grants short-term loans in foreign currencies to its subsidiaries for the purposes of the Group’s activities.
In order to reduce exposure to foreign exchange risks, EDF mainly finances these loans by short-term commercial paper issues in foreign currencies and in Euros, together with the use of currency hedging derivatives. Capitalised receivables are stated at nominal value. Impairment is recognised when the market value falls below the book value.
The initial cost of inventories includes all direct material costs (including the effect of hedging), labour costs and a share of indirect production costs.
Inventory consumption is generally valued under the weighted average unit cost method. Consumption of greenhouse gas emission rights and Energy Savings Certificates is valued under the FIFO (first in first out) method.
Inventories are carried at the lower of historical cost or net realisable value.
Inventory accounts include:
The stated value of nuclear fuel and materials and work-in-progress is determined based on direct processing costs including materials, labour and subcontracted services (e.g. fluoration, enrichment, fabrication, etc.).
In application of the concept of “loaded fuel” as defined in the ministerial order of 21 March 2007, the cost of inventories for fuel loaded in the reactors but not yet irradiated includes expenses for spent fuel management and long-term radioactive waste management. The corresponding amounts are taken into account in the relevant provisions.
Nuclear fuel consumption is determined by component (natural uranium, fluoration, enrichment, fuel assembly fabrication) as a proportion of the expected output when the fuel is loaded in the reactor. These quantities are valued at weighted average cost of inventories, applied to each component. Inventories are periodically corrected in view of forecast spent quantities based on neutronic measurements and physical inventories.
Other operating inventories include:
Impairment of spare parts depends mainly on the turnover of these parts.
Trade receivables are initially stated at nominal value.
They also include the value of unbilled receivables for energy already supplied.
A write-down is recorded when, based on the probability of recovery assessed according to the type of receivable, the recoverable amount of receivables falls below their book value. Depending on the nature of the receivable, the risk associated with doubtful receivables is assessed individually or by reference to provision matrices based on credit loss histories. EDF does not bear the risks of non-payment for the delivery portion of these receivables, which is borne by Enedis.
Marketable securities are initially recorded as assets at acquisition cost, and restated at the lower of historical cost or present value at year-end.
For listed securities, the present value is equal to the year-end stock market price. Forun listed securities, the market value is the probable trading value taking theCompany’s growth prospects into consideration.
Provisions are recorded to fully cover any unrealised losses, without netting against unrecorded unrealised gains.
Gains and losses on sales of marketable securities are valued using the FIFO (first infirst out) method.
