Universal Registration Document 2022

Details of special concession liabilities are as follows:

(in millions of euros)	31/12/2022	31/12/2021
Value in kind of assets	Value in kind of assets 31/12/2022 106	Value in kind of assets 31/12/2021 107
Revaluation difference	Revaluation difference 31/12/2022 733	Revaluation difference 31/12/2021 758
Additional depreciation	Additional depreciation 31/12/2022 431	Additional depreciation 31/12/2021 377
Rights in hydropower concession assets	Rights in hydropower concession assets31/12/20221,270	Rights in hydropower concession assets31/12/20211,242
Value in kind of assets	Value in kind of assets 31/12/2022 2,131	Value in kind of assets 31/12/2021 2,008
Unamortised financing by the operator	Unamortised financing by the operator 31/12/2022 (1,354)	Unamortised financing by the operator 31/12/2021 (1,306)
Amortisation of grantor financing	Amortisation of grantor financing 31/12/2022 376	Amortisation of grantor financing 31/12/2021 370
Contributions received for concessionary plant assets under construction	Contributions received for concessionary plant assets under construction 31/12/2022 7	Contributions received for concessionary plant assets under construction 31/12/2021 6
Rights in public distribution concession assets*	Rights in public distribution concession assets*31/12/20221,160	Rights in public distribution concession assets*31/12/20211,078
TOTAL SPECIAL CONCESSION LIABILITIES	TOTAL SPECIAL CONCESSION LIABILITIES31/12/20222,430	TOTAL SPECIAL CONCESSION LIABILITIES31/12/20212,320

* Special public distribution concession liabilities concern the Island Energy Systems (SEI) public electricity distribution concessions.

Note 25 Provisions for risks

Accounting principles and methods

EDF recognises provisions when it has a present obligation (legal or constructive) arising from a past event, an outflow of resources will probably be required to settle the obligation, and the obligation amount can be estimated reliably.

If it is anticipated that all or part of the expenses covered by a provision will be reimbursed, the reimbursement is recognised under receivables if and only if EDF is virtually certain of receiving it.

Provisions are determined based on the Company’s expectation of the cost necessary to settle the obligation. Estimates are based on management data from the information system, assumptions adopted by the Company, and if necessary experience of similar transactions or operations, based on independent expert reports or contractor quotes. The various assumptions are reviewed for each closing of the accounts.

Other provisions notably concern:

losses relating to multi-year agreements for the purchase or sale of energy and services:
- losses on energy purchase agreements are measured by comparing the contractual purchase cost with the forecast market price,
- losses on energy sale agreements are measured by comparing the estimated income under the contractual terms with the cost of the energy to be supplied,
- losses on gas-related service agreements are measured by comparing the costs of fulfilling contracts with the resulting economic benefits, based on market and sales assumptions;
unrealised foreign exchange losses;
risks relating to subsidiaries and affiliates;
tax risks;
litigation;
decommissioning costs for fossil-fired and hydropower plants;
costs of replacing assets operated under public electricity distribution concessions;
provisions related to environmental schemes (see notes 6 and 17).

In extremely rare cases, specific litigation covered by a provision may be unmentioned in the notes to the financial statements if such disclosure could cause serious prejudice to the Company.

Changes in provisions for risks are as follows:

		Increases		Decreases
(in millions of euros)	31/12/2021	Operating ⁽³⁾	Financial	Utilisations ⁽³⁾	Reversals ⁽³⁾	Financial	31/12/2022
Provisions for unrealised exchange losses ⁽¹⁾	745	-	683	-	-	(371)	1,057
Provisions for losses on contracts ⁽²⁾	1,840	-	(122)	(224)	(1,006)	-	488
Provisions for other risks	319	81	-	(27)	(5)	-	368
PROVISIONS FOR RISKS	2,904	81	561	(251)	(1,011)	(371)	1,913

(1) Provisions for unrealised exchange losses amount to €1,057 million at 31 December 2022 and principally concern the hybrid notes (€301 million) and other borrowings after hedging (€288 million). The €312 million change in these provisions is included in the financial result (see note 11 (5)).

(2) Net reversals from provisions for losses on contracts, amounting to €1,352 million, principally concern long-term agreements for purchases of LNG and regasification service contracts.

(3) See note 5.

Universal Registration Document 2022

Introduction

Note 25 Provisions for risks

Accounting principles and methods