ESG Report of the
ENEA Capital Group for 2021

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34. Accounting for subsidies and road lighting modernisation services

Accounting rules

Subsidies

The Group receives subsidies in the form of tangible assets and reimbursement of costs spent on tangible assets. Subsidies are recognised in the statement of financial position as deferred revenue if there is sufficient certainty that they will be received and that the Group will  meet  the relevant  conditions.  Subsidies  received as  reimbursement of costs incurred by the Group are systematically recognised as revenue in the statement of profit and loss in the period in which the associated costs are incurred. Subsidies received as reimbursement of investment expenditures incurred by the Group are systematically recognised,  proportionately to depreciation charges,  as other  operating revenue    in the statement of profit and loss and other comprehensive income throughout the asset’s period of use.

Recognising a subsidy in financial statements depends on the intended use of such financing, e.g.:

  • subsidies received and intended for the acquisition or  manufacture of tangible assets  are recognised in the statement of financial position as deferred revenue,
  • subsidies for purposes other than those described above are recognised in the statement of profit and loss as other operating revenue.

Accounting for income from subsidies and road lighting modernisation services

As at
31 December 2021 31 December 2020
Long-term
Accounting for deferred revenue – subsidies 271 458 168 473
Accounting for deferred revenue – road lighting modernisation services 105 558 92 689
Total non-current deferred revenue 377 016  261 162 
     
Short-term
Accounting for deferred revenue – subsidies 13 368 9 326
Accounting for deferred revenue – road lighting modernisation services 4 705 3 982
Total current deferred revenue 18 073  13 308 

Schedule for accounting for deferred revenue

As at
31 December 2021 31 December 2020
Up to one year 18 073 13 308
From one to five years 68 971 52 448
Over five years 308 045 208 714
Total deferred revenue 395 089  274 470 

The item 'deferred revenue concerning subsidies’  includes  mainly EU subsidies  and subsidies  from  the NFOŚiGW  for the development of electricity and heating infrastructure.

Road lighting modernisation services, i.e. improving the quality and efficiency of road lighting, are services provided     on an on-going basis. Revenue from improving the quality and efficiency of road lighting is recognised proportionally over the economic period of use for the tangible assets created.

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