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. For unlisted securities, the market value is the probable trading value taking the Company’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 in first out) method.
Bond redemption premiums and any issue premiums are amortised in equal portions prorated to the duration of the bond (straight-line method), regardless of the redemption pattern, applying the option allowed by Article 212-10 of the national chart of accounts.
For the specific case of the OCEANE bond issue of September 2020, EDF decided to apply the “two separate operations” method for recognition of the issue premium, and the accrued interest method for amortisation, as allowed by the Article 212-10 of the national chart of accounts.
Commissions and external costs paid by EDF upon issuance of borrowings and included in “Deferred charges” are spread on a straight-line basis over the term of the related instruments.
Foreign currency receivables and payables are translated into Euros at the year-end exchange rates. The resulting translation differences are recorded in the balance sheet under “Unrealised foreign exchange gains” and “Unrealised foreign exchange losses”. Provisions are recorded to cover all unrealised exchange losses on foreign currency borrowings not hedged for exchange risks. Unrealised gains are not recognised in the income statement.
Unrealised gains and losses on currency derivatives classified as hedging instruments are recorded in the balance sheet in the revaluation surplus accounts, and netted with the unrealised foreign exchange gains and losses booked in respect of the hedged items, in compliance with ANC regulation 2015-05 of 2 July 2015 on forward financial instruments and hedging operations. Realised gains and losses on hedging derivatives are recognised in the income statement symmetrically to gains and losses on the hedged item.
Foreign exchange gains and losses on trade receivables and payables are recorded in operating income and expenses.
This item mainly includes excess depreciation recorded for tax purposes and relates to:
Perpetual subordinated bonds issued by EDF in Euros and other currencies are recorded in compliance with the French Chartered accountants’ body Ordre des Experts Comptables opinion 28 of July 1994, taking their specific characteristics into consideration.
As a result, they are classified as additional equity, since redemption is exclusively controlled by EDF.
Issuance expenses and issue premiums are amortised through the income statement, on a pro rata basis.
Interest paid on these bonds is recorded in the financial result.
These liabilities relate mostly to public electricity distribution concessions for the Island Energy Systems (SEI), and hydropower concessions.
These liabilities represent the contractual obligations specific to the concession rules for public electricity distribution concessions in France, and comprise the following:
When assets are replaced, amortisation recognised on the portion of assets considered to be financed by the concession-granting authority, and the provision for replacement established for the relevant asset, are cancelled and transferred to rights in existing assets. Any excess provision is taken to income.
During the concession, the grantor’s rights in assets to be replaced are thus transferred upon the asset’s replacement to become the grantor’s rights in existing assets, with no outflow of cash to the benefit of the grantor.
