Universal Registration Document 2021

13.1.2  Non-monetary changes in working capital

Non-monetary changes include the effect of changes in the scope of consolidation, foreign exchange effects, changes in fair values and the effect of reclassifications.

The variation in non-monetary changes in 2021 is principally due to the €(0.8) billion change in fair value (including €(0.5) billion on inventories carried at fair value) and the €(0.3) billion foreign exchange effect (principally attributable to the rise of the pound sterling against the euro). Reclassification of EDF’s CSPE receivable to “Other  liabilities” at 31  December 2021 in  the amount of €294 million is also included in the variation in non-monetary changes (see note 13.3.4).

13.1.3 Monetary changes in working capital

*The change in other receivables and payables includes monetary changes in CO₂ emission rights and green certificates presented in intangible assets in the balance sheet, and derivatives related to operations.

Monetary changes in working capital were down by €(1.5) billion in 2021, mainly as a result of higher market prices with an effect of €(1.9) billion on working capital for the trading activity (an increase in net margin calls and inventories) and the operating working capital of other Group subsidiaries (change of €(1.8) billion in the net trade receivables/trade payables position). Conversely, the decrease in purchase obligations is reflected in a €2.3 billion improvement in working capital, relating to the CSPE receivable (see note 13.3.4).

These three factors also explain most of the difference in the change in working capital between 2020 and 2021.

13.2 Inventories

Accounting principles and methods

Inventories are recognised at the lower of acquisition cost or net realisable value, except for inventories held for trading activities, which are carried at market value. Inventories consumed are generally valued by the weighted average unit cost method.

Cost includes all direct materials costs, labour costs, and a share of indirect production costs.

Nuclear fuel

Inventory accounts include:

• nuclear materials, whatever their form during the fuel production cycle;
• and fuel components in the warehouse or in the reactor.

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 accordance with regulatory obligations specific to each country, inventories of fuel (new or not entirely consumed) may also comprise expenses for spent fuel management and long-term radioactive waste management, with corresponding provisions or debts in the liabilities, or full and final payments made when the fuel is loaded.

In France, 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.

In compliance with IAS 23, interest expenses incurred in financing inventories of nuclear fuels are charged to expenses for the period provided these inventories are manufactured in large quantities on a repetitive basis.

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. Inventories are periodically corrected in view of forecast spent quantities based on neutronic measurements and physical inventories.

Other inventories

Other inventories comprise :

• other fuels, comprising fossil fuels required for operation of fossil-fired power plants and gas stocks;
• other operating supplies, consisting of operating materials and equipment such as spare parts supplied under a maintenance programme (excluding capitalised strategic safety spare parts);
• goods and services in progress, particularly relating to the businesses of EDF Renewables, Dalkia and Framatome;
• other inventories, mainly consisting of certificates issued under the various environmental schemes (see notes 5.4.3 and 10.2) and capacity obligation mechanisms (capacity guarantees in France – see note 5.1).

Other non-trading operating inventories are generally valued at weighted average cost including direct and indirect purchasing costs.

Impairment of spare parts principally depends on the turnover of these parts.