will a decision that is based on npv ever change if it were based on irr instead why 613256

Fortum Corporation (2010)

1. Accounting Policies [extract]

1.25 Assets and liabilities related to decommissioning of nuclear power plants and the disposal of spent fuel [extract]

Fortum owns Loviisa nuclear power plant in Finland. Fortum’s nuclear related provisions and the related part of the State Nuclear Waste Management Fund and the related nuclear provisions are both presented separately on the balance sheet. Fortum’s share in the State Nuclear Waste Management Fund has been accounted for according to IFRIC 5, Rights to interests arising from decommissioning, restoration and environmental rehabilitation funds which states that the fund assets are measured at the lower of fair value or the value of the related liabilities since Fortum does not have control or joint control over the State Nuclear Waste Management Fund. The related provisions are the provision for decommissioning and the provision for disposal of spent fuel…

… Fortum’s actual share of the State Nuclear Waste Management Fund, related to Loviisa nuclear power plant, is higher than the carrying value of the Fund in the balance sheet. The legal nuclear liability should, according to the Finnish Nuclear Energy Act, be fully covered by payments and guarantees to the State Nuclear Waste Management Fund. The legal liability is not discounted while the provisions are, and since the future cash-flow is spread over 100 years, the difference between the legal liability and the provisions are material…