EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

10.3

Property, plant and equipment used in generation and other tangible assets owned by the Group

Accounting principles and methods Property, plant and equipment is recorded at acquisition or production cost: the cost of facilities developed in-house includes all labour and materials ● costs, and all other production costs that can be included in the construction of the asset; borrowing costs attributable to the financing of an asset incurred during the ● construction period are included in the value of the asset provided it is a qualifying asset as defined by IAS 23 “Borrowing costs”; the cost of property, plant and equipment also includes the initial estimate ● of decommissioning costs. These costs are recognised in assets against the provision recognised to cover these obligations. At the date of commissioning, these assets are measured and recorded in the same way as the corresponding provision (see note 15); decommissioning costs for nuclear generation installations also include last ● core costs (see note 15). When some of the decommissioning costs for a plant are to be borne by a partner, the expected reimbursement is recognised as accrued income in the assets. The difference between the provision and the accrued income is recorded in “Property, plant and equipment”, and subsequent payments by the partner are deducted from the accrued income. The Group capitalises safety expenses incurred as a result of legal and regulatory obligations sanctioning non-compliance by an administrative ban from operation.

Strategic safety spare parts for generation facilities are treated as property, plant and equipment, and depreciated over the residual useful life of the installations. The costs of operations that are necessary for generation assets to remain in service, and are undertaken at the time of scheduled shutdowns, particularly during major inspections, are capitalised and amortised over a period corresponding to the time elapsing between two inspections. When a part of an asset has a different useful life from the overall asset’s useful life, it is identified as an asset component and depreciated over a specific period. Depreciation Items of property, plant and equipment are depreciated on a straight-line basis over their useful life, defined as the period during which the Group expects to draw future economic benefits from their use. Depending on each country’s specific regulations and contractual arrangements, the expected useful lives for the main facilities are as follows: nuclear generation facilities: 40 to 50 years; ● wind farm and photovoltaic facilities: 20 to 25 years; ● fossil-fired power plants (mainly CCGT-Combined Cycle Gas Turbine plants): ● 25 to 45 years; transmission and distribution installations (lines, substations): ● 20 to 60 years; other general plant and machinery: 10 to 20 years. ●

The net values of property, plant and equipment used in generation and other tangible assets owned by the Group are as follows:

Changes in the scope of consolidation (1)

Translation adjustments

Other movements (2)

31/12/2020

31/12/2019

Increases

Decreases

(in millions of euros)

Land and buildings Nuclear power plants

13,797 75,213 18,486

479

(89)

(62)

- -

(34) 802

14,091 77,329 18,166

3,723

(1,778)

(631) (185)

Fossil-fired & hydropower plants Other installations, plant, machinery, equipment & other

330

(341)

1

(125)

21,316

1,599

(559)

(812)

(1,042)

118 (32) 162 891

20,620

Right-of-use assets (3) Assets in progress (4)

5,355

479

-

(48)

(21)

5,733

34,959 169,126 (7,518) (49,345) (12,765)

5,362

(30)

(850)

12

39,616 175,555 (7,843) (50,353) (13,450)

Gross value

11,972

(2,797)

(2,588)

(1,050)

Land and buildings Nuclear power plants

(406)

67

10

5

(1)

(3,522) (1,352)

1,696

337 178

- -

481 150

Fossil-fired & hydropower plants Other installations, plant, machinery, equipment & other

339

(9,173) (1,022)

(1,293)

519

309

143

(41)

(9,536) (1,617)

Right-of-use assets (3) Assets in progress (4)

(697)

-

5 6

2

95 86

(204)

(40)

3

(7)

(156)

Depreciation and impairment

(80,027) 89,099

(7,310) 4,662

2,624 (173)

845

143

770

(82,955) 92,600

NET VALUE

(1,743)

(907)

1,661

Changes in the scope of consolidation essentially relate to EDF Renewables. (1) Other movements include the effect on assets associated with provisions and underlying assets of the €707 million change in the real discount rate (2) used to calculate provisions related to EDF’s nuclear generation (see note 15.1) and EDF Energy for €322 million (see note 15.2). Right-of-use assets are detailed in note 10.4. (3) Increases in assets in progress are stated net of the effects of newly-commissioned assets. Assets in progress are detailed in note 10.6. (4)

339

EDF - UNIVERSAL REGISTRATION DOCUMENT 2020