Pursuant to European regulation 1606/2002 of 19 July 2002 on the adoption of international accounting standards, the EDF group’s consolidated financial statements at 31 December 2021 are prepared under the presentation, recognition and measurement rules set out in the international accounting standards published by the IASB and approved by the European Union for application at 31 December 2021. These international standards are IAS (International Accounting Standards), IFRS (International Financial Reporting Standards), and SIC and IFRIC interpretations.
The Group has not opted for early application of standards and interpretations that were not yet mandatory in 2021.
The parent company’s functional currency is the Euro. The Group’s financial statements are presented in millions of euros.
The accounting and valuation methods applied by the Group in the consolidated financial statements at 31 December 2021 are identical to those used in the consolidated financial statements at 31 December 2020, with the exception of the changes presented below in notes 1.2.1, 1.2.2, 1.2.3 and 1.2.4. Information is also given on the standards, amendments and interpretations adopted by the European Union that are applicable from 1 January 2022 (note 1.2.5).
For purposes of clarity, the accounting principles and methods used are now described in individual notes to the financial statements.
These amendments were adopted on 13 January 2021 and have been applicable since 1 January 2021.
The principal interest rates concerned that are used by EDF are the Eonia, the Libor USD and the Libor GBP.
The modification of effective interest rates resulting from the reform is applied prospectively, there is no significant impact on profit and loss and the hedging relationships for the instruments concerned are continued.
This reform has no significant impact on the Group’s net income for 2021, and its effects are mainly operational (renegotiation of contracts, fallback provisions, information system upgrades).
Due to its long-term fixed-rate borrowing position (see note 18.3.3.3), the Group’s exposure is essentially concentrated in interest rate derivatives that are used to swap fixed-rate debt to floating rates. On these instruments, the reference rate curves for collateral agreements have been modified, replacing the Eonia by the Ester. Following adjustment of the value of the derivatives, receipt of cash compensation of €22 million was recognised.
The Group adhered to the ISDA Fallback protocol in November 2021 and the Libor GBP was replaced by the Sonia for all the derivatives concerned from 1 January 2022.
For the USD Libor, the transition operations will take place in line with the end date for its publication i.e. by 30 June 2023.
Application of the “Covid-19-Related Rent Concessions” amendment has been extended for one year (for payments up to 30 June 2022 at the latest). This allows lessees benefiting from “payment holidays” or temporary rent reductions as a direct result of the Covid-19 pandemic to record the impact directly in profit and loss.
This amendment has no impact on the Group’s financial statements.
In May 2021, the IASB approved the IFRIC’s agenda decision concerning attribution of benefits earned under post-employment benefit plans.
This decision principally concerns retirement indemnities in France paid under the IEG (electricity and gas sector) benefit plans. The corresponding commitments amounted to €941 million at 31 December 2020 for the two segments “France – Generation and supply activities” and “France – Regulated activities” (see note 16.2.2).
Modification of the benefit attribution method led to a €(67) million reduction before tax in benefit commitments at 1 January 2021, recognised in equity (“Other changes”).
In April 2021, the IASB confirmed the position taken by the IFRIC in March 2021 following its tentative agenda decision of December 2020 on recognition of configuration and customisation costs on a software provided under a SaaS (Software as a Service) contract. The matter was put on the agenda due to the diversity of practices observed. The IFRIC agenda decision states that in most cases, in application of IAS 38, these costs should be treated as expenses, not intangible assets, since the entity does not control the software and the configuration/ customisation activities do not generate a resource that is controlled by the customer independently of the software.
In application of this decision, configuration and customisation costs for SaaS which were previously capitalised were restated at 1 January 2021, with a corresponding adjustment of €(88) million before tax to equity (in “Other changes”). Configuration and customisation costs incurred in 2021 on such contracts are included in “Other external expenses”.
From 1 January 2022, the proceeds from sales of items produced by an asset that has not yet been commissioned will no longer be deducted from the cost of the asset. These proceeds and the related costs will be included in profit and loss
The Group will be concerned via its projects for construction of energy generation
plants.
These amendments define the costs that must be taken into consideration when assessing whether a contract is onerous.
The Group does not anticipate any material impact as a result of application of these amendments.
