GDF SUEZ SA (2011) Notes to the Consolidated Financial Statements [extract] 1.5.4.2 Other intangible assets [extract] Other internally-generated or acquired intangible assets Other intangible assets include mainly: amounts paid or payable as consideration for rights relating to concession contracts or public service contracts; customer portfolios acquired on business combinations; power station capacity rights: the Group helped finance the construction of certain nuclear power stations operated […]

Contractual rights to cash in termination arrangements The facts of the SCA are as in Example 28.1 above. At the end of the term, the grantor will either pay for the infrastructure assets at their net book value, determined on the basis of the contract, or it may decide to grant a new SCA on the basis of a competitive tender, which will exclude the […]

Telenor ASA (2010) Notes to the financial statements /Telenor Group [extract] 19. Intangible assets [extract] DTAC operates under a concession right to operate and deliver mobile services in Thailand granted by the Communication Authority of Thailand (“CAT”). CAT allows DTAC to arrange, expand, operate and provide the cellular system radio communication services in various areas in Thailand. The concession originally covered a 15-year period but […]

Executory and contractual obligations to maintain and restore the infrastructure The operator under a water supply service concession is required as part of the overall contractual arrangement to replace four water pumps as soon as their performance drops below certain quality levels. The operator expects this to be the case after 15 years of service. The expected cost of replacing the pumps is CU 1,000. […]

Recognising a provision because of a constructive obligation Scenario 1; Environmental policy – contaminated land An entity in the oil industry operates in a country with no environmental legislation. However, it has a widely published environmental policy in which it undertakes to clean up all contamination that it causes and it has a record of honouring this published policy. During the period the entity causes […]

No provision without a past obligating event The government introduces a number of changes to the income tax system. As a result of these changes, an entity in the financial services sector will need to retrain a large proportion of its administrative and sales staff in order to ensure continued compliance with financial services regulation. At the end of the reporting period, no training has […]

When the recognition of a provision gives rise to an asset An entity operates an offshore oilfield where its licensing agreement requires it to remove the oil rig at the end of production and restore the seabed. 90% of the eventual costs relate to the removal of the oil rig and restoration of damage caused by building it, with 10% expected to arise through the […]

Assume that there are two banks, A and Z, in the banking system. Bank A receives a primary deposit of $600,000, and it must keep reserves of 12 percent against deposits. Bank A makes a loan in the amount that can be safely lent. Show what Bank A”s balance sheet of assets and liabilities would look like immediately after the loan. Assume that a check […]

PSA Peugeot Citroën (2009) Half-Year Financial Report 2009 [extract] 17.2. REFINANCING TRANSACTIONS [extract] – EIB loan In April 2009, Peugeot Citroën Automobiles S.A. obtained a 400 million 4-year bullet loan from the European Investment Bank (EIB). Interest on the loan is based on the 3-month Euribor plus 179 bps. At June 30, 2009 the government bonds (OATs) given by Peugeot S.A. as collateral for all […]

Challenge Problem ABBIX has a complex financial system with the following relationships: The ratio of required reserves to total deposits is 15 percent, and the ratio of no checkable deposits to checkable deposits is 40 percent. In addition, currency held by the nonbank public amounts to 20 percent of checkable deposits. The ratio of government deposits to checkable deposits is 8 percent. Initial excess reserves […]