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CONSOLIDATED FINANCIAL REPORT | EXPLANATORY NOTES
174
In both cases, revenue recognition depends on there being reasonable assurance that the related
consideration will be received.
The method of recognising revenue for construction contracts is outlined in Section B.13 Construction
contracts.
B.21 GOVERNMENT GRANTS
Government grants are recognised on an accrual basis in direct relation to the costs incurred when there is a
formal resolution approving the allocation and, when the right to the grant is assured since it is reasonably
certain that the Group will comply with the conditions attaching to its receipt and that the grant will be
received.
(a) Grants related to assets
Government grants relating to investments in property, plant and equipment are recorded as deferred
income in "Other payables", classified under current and non-current liabilities for the respective long-term
and short-term portion of such grants. Deferred income is recognised in "Other income" in the income
statement on a straight-line basis over the useful life of the asset to which the grant refers.
(b) Grants related to income
Grants other than those related to assets are credited to the income statement as "Other income".
B.22 COST RECOGNITION
Costs are recognised when they relate to assets and services acquired or consumed during the year or to
make a systematic allocation to match costs with revenues.
B.23 TAXATION
Current taxes are calculated on the basis of the taxable income for the year, applying the tax rates effective
at the end of the reporting period.
Deferred taxes are calculated on all the differences emerging between the taxable base of an asset or
liability and the related carrying amount, except for goodwill and those differences arising from investments
in subsidiaries, where the timing of the reversal of such differences is controlled by the Group and it is likely
that they will not reverse in a reasonably foreseeable future. Deferred tax assets, including those relating to
past tax losses, not offset by deferred tax liabilities, are recognised to the extent it is likely that future taxable
profit will be available against which they can be recovered. Deferred taxes are determined using tax rates
that are expected to apply in the years when the differences are realised or extinguished, on the basis of tax
rates that have been enacted or substantively enacted by the end of the reporting period.