EDF_REGISTRATION_DOCUMENT_2017

6.

FINANCIAL STATEMENTS Notes to the financial statements

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 experience-based statistical methods. EDF does not bear the risks of non-payment for the delivery portion of these receivables, which is borne by Enedis. 1.9.2 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. Impairment is 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. Marketable securities AND REDEMPTION PREMIUMS Bond redemption 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. 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. GAINS AND LOSSES 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 translation adjustment booked in respect of the hedged items, in application of regulation 2015-05 of 2 July 2015 on forward financial instruments and hedging operations (see note 1.1). UNREALISED FOREIGN EXCHANGE 1.11 This item mainly includes excess depreciation recorded for tax purposes and relates to: ordinary depreciation of generation and distribution facilities; ■ exceptional depreciation of software developed in-house by the Company; ■ amortisation of acquisition expenses for new investments by the Company. ■ 1.13 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 premiums are amortised through the income statement, on a pro rata basis. Interest paid on these bonds is recorded in the financial result. ADDITIONAL EQUITY BOND ISSUANCE EXPENSES 1.10 TAX-REGULATED PROVISIONS 1.12

In order to reduce exposure to foreign exchange risks, the Group mainly finances these loans by short-term commercial paper issues in foreign currencies and in euros, together with the use of currency hedging derivatives. Capitalised receivables are stated at nominal value. Impairment is recognised when the market value falls below the book value.

1.8

INVENTORIES AND WORK-IN-PROGRESS

The initial cost of inventories includes all direct material costs (including the effect of hedging), labour costs and a share of indirect production costs. Inventory consumption is generally valued under the weighted average unit cost method. Consumption of greenhouse gas emission rights and Energy Savings Certificates is valued under the FIFO (first in first out) method. Inventories are carried at the lower of historical cost or net realisable value. 1.8.1 Inventory accounts include: nuclear materials, whatever their form during the fuel production cycle; ■ 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, production, etc). In accordance with the concept of “loaded fuel” as defined in the 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. Nuclear fuel consumption is determined by component (natural uranium, fluoration, enrichment, fuel assembly production) 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, applied to each component. Inventories are periodically corrected in view of forecast spent quantities, based on neutronic measurements and physical inventories. 1.8.2 Other operating inventories include: fossil fuels required for operation of fossil-fired power plants; ■ operating materials and equipment such as spare parts supplied under a ■ maintenance programme (excluding capitalised strategic safety spare parts); greenhouse gas emission rights and Energy Savings Certificates acquired for the ■ generation cycle (see notes 1.19.1 and 1.19.2); gas stocks, valued at weighted average cost, including direct and indirect ■ purchase costs, especially transport costs; capacities held under the capacity mechanisms (capacity guarantees in France) ■ (see note 3.3). Impairment of spare parts depends mainly on the turnover of these parts. Nuclear fuel and materials Other operating inventories

1.9

ACCOUNTS RECEIVABLE

AND MARKETABLE SECURITIES

Trade receivables 1.9.1 Trade receivables are initially stated at nominal value.

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EDF I Reference Document 2017