99
98
Annual Financial Statements
the asset or liability will be settled, taking into consideration the tax
rates (and tax laws) that have been put into effect or are essentially in
effect up until the balance sheet date. In the event where it is impos-
sible to identify the timing of the reversal of the temporary differences,
the tax rate in effect on the day after the balance sheet date is used.
Deferred tax assets are recognized to the extent that there will be a
future tax profit to be set against the temporary difference that creates
the deferred tax asset.
Deferred income tax is recognized for the temporary differences that
result from investments in subsidiaries and associates, except for the
case where the reversal of the temporary differences is controlled by
the Group and it is possible that the temporary differences will not be
reversed in the foreseeable future.
Most changes in the deferred tax assets or liabilities are recognized as
part of the tax expense in the income statement. Only changes in as-
sets or liabilities that affect the temporary differences are recognized
directly in the Equity of the Group, such as the revaluation of property
value, that results in the relevant change in deferred tax assets or li-
abilities being charged against the relevant Equity account.
3.19 Employee benefits
Short-term benefits: Short-term employee benefits (except post-em-
ployment benefits) monetary and in kind are recognized as an ex-
pense when they accrue. Any unpaid amount is booked as a liability,
while in the case where the amount paid exceeds the amount of ser-
vices rendered, the company recognizes the excess amount as an as-
set (prepaid expense) only to the extent that the prepayment will lead
to a reduction of future payments or to reimbursement.
Post-employment benefits: Post-employment benefits comprise pen-
sions or other benefits (life insurance and medical insurance) the
company provides after retirement as an exchange for the employees’
service with the company. Thus, such benefits include defined con-
tribution schemes as well as defined benefits schemes. The accrued
cost of defined contribution schemes is booked as an expense in the
period it refers to.
• Defined contribution scheme
According to the defined contributions scheme, the (legal or implied)
obligation of the company is limited to the amount that it has been
agreed that it will contribute to the entity (i.e. pension fund) that man-
ages the contributions and provides the benefits. Thus the amount of
benefits the employee will receive depends on the amount the com-
pany will pay (or even the employee) and from the paid investments of
such contributions.
The payable contribution from the company to a defined contribution
scheme, is either recognized as a liability after the deduction of the
paid contribution, or as an expense.
• Defined benefits scheme
The liability that is reported in the balance
sheet with respect to this scheme is the
present value of the liability for the defined
benefit less the fair value of the scheme’s
assets (if there are such) and the changes
that arise from any actuarial profit or loss
and the service cost. The commitment of
the defined benefit is calculated annually
by an independent actuary with the use of
the projected unit credit method. The yield
of long-term Greek Government Bonds is
used as a discount rate.
The actuarial profit and losses are liabil-
ity items for the company’s benefits and
for the expense that will be recognized in
the results. Such that emerge from adjust-
ments based on historical data and are
over or under the 10% margin of the ac-
cumulated liability, are booked in the re-
sults in the expected average service time
of the scheme’s participants. The cost for
the service time is directly recognized in
the results except for the case where the
scheme’s changes depend on the employ-
ees’ remaining service with the company.
In such a case the service cost is booked
in the results using the straight line method
within the maturity period.
• Benefits for employment
termination:
Termination benefits are payable when
employment is terminated before the
normal retirement date, or whenever an
employee accepts voluntary redundancy
in exchange for these benefits. The
Group books these benefits when it is
committed, either when it terminates
the employment of existing employees
according to a detailed formal plan for
which there is no withdrawal possibility,
or when it provides such benefits as
an incentive for voluntary redundancy.
When such benefits are deemed payable
in periods that exceed twelve months
from the Balance Sheet date, then
they must be discounted based on the
yields of investment grade corporate or
government bonds.
In the case of an offer that is made to en-
courage voluntary redundancy, the valua-
tion of benefits for employment termination must be based on
the number of employees that are expected to accept the offer.
In case of an employment termination where there is inability to
assess the number of employees to use such benefits, a disclo-
sure for a contingent liability is made but no accounting treat-
ment is followed.
3.20 Grants
The Group recognizes Government Grants that cumulatively
satisfy the following criteria:
a) There is reasonable certainty that the company has complied
or will comply to the conditions of the grant and
b) it is probable that the amount of the grant will be received.
Government Grants are booked at fair value and are system-
atically recognized as revenues according to the principle of
matching the grants with the corresponding costs that they are
subsidizing.
Government Grants that relate to assets are included in long-
term liabilities as deferred income and are recognized system-
atically and rationally as revenues over the useful life of the fixed
asset.
3.21 Provisions
Provisions are recognized when the Group has present obli-
gations (legal or constructive) as a result of past events, their
settlement through an outflow of resources is probable and the
exact amount of the obligation can be reliably estimated. Provi-
sions are reviewed during the date when each balance sheet
is compiled so that they may reflect the present value of the
outflow that is expected to be required for the settlement of the
obligation. Contingent liabilities are not recognized in the finan-
cial statements but are disclosed, except if the probability that
there will be an outflow of resources that embody economic
benefits is very small. Contingent claims are not recognized in
the financial statements but are disclosed provided that the in-
flow of economic benefits is probable.
3.22 Recognition of income and expenses
Income:
Income includes the fair value of goods and services
sold, net of Value Added Tax, discounts and returns. Intercom-
pany revenue within the Group is eliminated completely. The
recognition of revenue is done as follows:
- Construction Projects Contracts:
The income from the
execution of construction contracts is ac-
counted for in the period the project is con-
structed, based on its completion stage.
- Sale of goods:
Sales of goods are rec-
ognized when the Group transfers goods
to customers, the goods are accepted by
them and the collection of the resulting
claim is reasonably assured.
- Provision of services:
Income from the
provision of services is accounted for in the
period during which the services are ren-
dered, based on the stage of completion of
the service in relation to the total services
to be rendered.
- Income from assigned rights for use
of tangible assets (Compensative
benefits):
The fair value of the assigned
rights is recognized as deferred income
and are amortized through the income
statement according to the completion of
the contracts for which these rights have
been assigned.
- Income Interest:
Interest income is rec-
ognized on a time proportion basis using
the effective interest rate. When there is
impairment of assets, their book value is
reduced to their recoverable amount which
is the present value of the expected future
cash flows discounted using the initial real
interest rate. Interest is then booked using
the same interest rate calculated on the im-
paired (new book) value.
- Dividends:
Dividends are accounted for
as revenue when the right to receive pay-
ment is established.
Expenses:
Expenses are recognized in
the results on an accrued basis. The pay-
ments made for operating leases are trans-
ferred to the results as an expense, during
the time the lease is used. Interest expens-
es are recognized on an accrued basis.
3.23 Leases
Group company as Lessee:
Leases of
fixed assets with which all the risks and
benefits related with ownership of an asset
are transferred to the Group, regardless of
whether the title of ownership of the asset
is eventually transferred or not, are finance
leases.
