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Consolidated Financial Report |
EXPLANATORY NOTES
2014 Annual Report
Prysmian Group
150
B.15 ASSETS HELD FOR SALE
Assets held for sale are classified as such if the carrying amount will be recovered principally through a sale transaction; for this
to be the case, the sale must be highly probable and the related assets must be available for immediate sale in their present
condition. Assets held for sale are measured at the lower of carrying amount and fair value less costs to sell.
B.16 TRADE AND OTHER PAYABLES
Trade and other payables are initially recognised at fair value and subsequently valued on the basis of the amortised cost
method.
B.17 BORROWINGS FROM BANKS AND OTHER LENDERS
Borrowings from banks and other lenders are initially recogni-
sed at fair value, less directly attributable costs. Subsequen-
tly, they are measured at amortised cost, using the effective
interest method. If the estimated expected cash flows should
change, the value of the liabilities is recalculated to reflect
this change using the present value of the expected new cash
flows and the effective internal rate originally established.
Borrowings from banks and other lenders are classified as
current liabilities, except where the Group has an unconditio-
nal right to defer their payment for at least twelve months
after the reporting date.
Borrowings from banks and other lenders are derecognised
when they are extinguished and when the Group has tran-
sferred all the risks and costs relating to such instruments.
Purchases and sales of financial liabilities are accounted for
at the settlement date.
B.18 EMPLOYEE BENEFITS
Pension plans
The Group operates both defined contribution plans and
defined benefit plans.
A defined contribution plan is a plan under which the Group
pays fixed contributions to third-party fund managers and to
which there are no legal or other obligations to pay further
contributions should the fund not have sufficient assets
to meet the obligations to employees for current and prior
periods. In the case of defined contribution plans, the Group
pays contributions, voluntarily or as established by contract,
to public and private pension insurance funds. The Group has
no obligations subsequent to payment of such contributions,
which are recognised as personnel costs on an accrual basis.
Prepaid contributions are recognised as an asset which will be
repaid or used to offset future payments, should they be due.
A defined benefit plan is a plan not classifiable as a defined
contribution plan. In defined benefit plans, the total benefit
payable to the employee can be quantified only after the
employment relationship ceases, and is linked to one or
more factors, such as age, years of service and remuneration;
the related cost is therefore charged to the period’s income
statement on the basis of an actuarial calculation. The
liability recognised for defined benefit plans corresponds to
the present value of the obligation at the reporting date, less
the fair value of the plan assets, where applicable. Obliga-