ESB Annual Report 2012 - (Page 66)
66 ESB Annual Report 2012 - Energy for connecting you
STATEMENT OF ACCOUNTING POLICIES
1. BASIS OF PREPARATION
Electricity Supply Board (ESB) is a statutory
corporation established under the Electricity
(Supply) Act, 1927 and is domiciled in Ireland.
The consolidated financial statements of ESB
as at and for the year ended 31 December
2012 comprise the Parent and its subsidiaries
(together referred to as “ESB” or “the Group”)
and the Group’s interests in associates and jointly
controlled entities.
The Parent and consolidated financial statements
are prepared under IFRS (International Financial
Reporting Standards) as adopted by the EU
(EU IFRS) and, in the case of the Parent, as
applied in accordance with the Companies Acts
1963 to 2012. The Companies Acts 1963 to
2012 provide a Parent company that presents
its individual financial statements together with
its consolidated financial statements with an
exemption from publishing the Parent income
statement and statement of comprehensive
income which forms part of the Parent financial
statements prepared and approved in accordance
with the Acts. The financial statements of
the Parent and Group have been prepared in
accordance with those IFRS standards and IFRIC
interpretations issued and effective for accounting
periods ending on or before 31 December 2012.
The Parent and consolidated financial statements
have been prepared on the historical cost basis
except for derivative financial instruments and
certain financial asset investments which are
measured at fair value.
These financial statements are prepared in euro,
and except where otherwise stated, all financial
information presented in euro has been rounded
to the nearest thousand.
The preparation of financial statements in
conformity with EU IFRS requires management
to make judgments, estimates and assumptions
that affect the application of policies and reported
amounts of assets and liabilities, income and
expenses. These estimates and associated
assumptions are based on historical experience
and various other factors that are believed to be
reasonable under the circumstances.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Judgments made
by management in the application of EU IFRS
that have a significant effect on the financial
statements and estimates with a significant risk of
material adjustment in the next year are discussed
in Note 28 to the financial statements.
The policies set out below have been consistently
applied to all years presented in these consolidated
financial statements and have been applied
consistently by Group entities – with the exception
of (i) adoption of new standards as set out below,
and (ii) non-repayable supply contributions (see
Section 12 of the policies below).
The board members consider that the Group has
adequate resources to continue in operational
existence for the foreseeable future. The financial
statements are therefore prepared on a going
concern basis. Further details of the Group’s
liquidity position are provided in Note 18 of the
financial statements.
2. BASIS OF CONSOLIDATION
The Group’s financial statements consolidate
the financial statements of the Parent and of all
subsidiary undertakings together with the Group’s
share of the results and net assets of associates
and joint ventures made up to 31 December
2012. The results of subsidiary undertakings
acquired or disposed of in the year are included
in the Group income statement from the date of
acquisition or up to the date of disposal.
Accounting for business combinations
Business combinations are accounted for using
the acquisition method as at the acquisition date,
which is the date on which control is transferred
to the Group. Control is the power to govern the
financial and operating policies of an entity so as
to obtain benefits from its activities. In assessing
control, the Group takes into consideration
potential voting rights that are currently
exercisable.
Acquisitions on or after 1 January 2010
From 1 January 2010 the Group applied IFRS 3
Business Combinations (2008) in accounting for
business combinations. From this date onwards,
the Group measures goodwill at the acquisition
date as:
the fair value of the consideration transferred;
plus
the recognised amount of any non-controlling
interests in the acquiree; plus if the business
combination is achieved in stages, the fair value
of the existing equity interest in the acquiree;
less
the net recognised amount (fair value) of
the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase
gain is recognised immediately in profit or loss.
Costs related to the acquisition, other than
those associated with the issue of debt or equity
securities, that the Group incurs in connection
with a business combination are expensed as
incurred.
Acquisitions between 1 January 2004 and 1
January 2010
For acquisitions between 1 January 2004 and 1
January 2010, goodwill represents the excess
of the cost of the acquisition over the Group’s
interest in the recognised amount (fair value) of
the identifiable assets, liabilities and contingent
liabilities of the acquiree. When the goodwill
excess was negative, a bargain purchase gain
was recognised immediately in profit or loss.
Transaction costs, other than those associated
with the issue of debt or equity securities, that
the Group incurred in connection with business
combinations were capitalised as part of the cost
of the acquisition.
Acquisitions prior to 1 January 2004 (date of
transition to IFRSs)
As part of its transition to IFRSs, the Group
elected to restate only those business
combinations that occurred on or after 1 January
2003. In respect of acquisitions prior to 1
January 2003, goodwill represents the amount
recognised under the Group’s previous accounting
framework, UK GAAP.
Table of Contents for the Digital Edition of ESB Annual Report 2012
ESB Annual Report 2012
Contents
Business Overview
Chairman’s Statement
Chief Executive Review
Our Strategy and Business Model
Operating and Financial Review
Operating Environment
Finance Review
Business Unit Sections: ESB Generation and Wholesale Markets
ESB Networks
NIE
Electric Ireland
Corporate Social Responsibility
Introduction from Executive Director, People and Sustainability
Sustainability Charter
Energy Usage 2012
ESB Innovation
Equality and Diversity
Our People
Our Community
Corporate Governance
Chairman’s Corporate Governance Statement
The Board
Executive Team
Board Members’ Report
Risk Management Report
Statement of Board Members’ Responsibilities
Independant auditor’s report to the stockholders of Electricity Supply Board (ESB)
Statement of Accounting Policies
Financial statements
Prompt Payments Act
ESB Annual Report 2012
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