
LEASES
Leases are contracts that convey the right to control
the use of an identified asset for a period of time in
exchange for consideration. Leases are recognised as
right-of-use assets and lease liability. Right-of-use
assets are recognised on the commencement date
and measured at acquisition cost, which includes the
amount of the initial measurement of lease liability,
any lease payments made before the commencement
date less any lease incentives received, and any
initial direct costs. Lease liabilities are recognised on
the commencement date, and are measured at the
present value of the remaining payments that will be
paid during the term of lease. The lease payments
are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, the
interest rate of additional credit, i.e. the average
interest rate on the Group’s loans and derivatives, is
used. Right-of-use assets are generally depreciated
according to IAS 16 Property, Plant and Equipment.
Lease payments are apportioned during the lease term
between the finance charge and the reduction of the
outstanding liability to produce a constant periodic
rate of interest on the remaining balance of the liability.
Lease payments associated with short-term leases
and all leases of low-value assets are recognised on
a straight-line basis as an expense in profit or loss.
Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT
equipment.
Lease payments received are recognised as income on
a straight-line basis over the lease term and presented
in the income statement under other income.
INVENTORIES
Inventories are measured at acquisition cost. The
IMPAIRMENT OF PROPERTY, PLANT AND
EQUIPMENT AND INTANGIBLE ASSETS
The Group assesses at each balance sheet date
whether there are indications that the carrying amount
of an asset may not be recoverable. If such indications
exist, the recoverable amount of the asset in question
will be measured. For the purposes of assessing
impairment, assets are examined at the level of
cash-generating units, that is, at the lowest level that
is mainly independent of other units and for which
there are separately identifiable cash flows and largely
independent from those of corresponding units.
The recoverable amount is the higher of an asset’s
fair value less costs to sell or value-in-use. The value-
in-use is determined by reference to discounted
future cash flows expected to be generated by the
asset. The discount rate used is pre-tax and reflects
the time value of money and asset specific risks.
Impairment loss is recognised when the carrying
amount of the asset is greater than its recoverable
amount. Impairment loss is charged directly to the
income statement. If a cash-generating unit is subject
to an impairment loss, it is allocated first to decrease
the goodwill and subsequently, to decrease the other
assets of the unit. At recognition of the impairment
loss, the useful life of the reamortised assets is reas
-
sessed. Impairment loss of assets other than goodwill
is reversed in the case that a change has occurred
in the estimates used in measuring the recoverable
amount of the asset. The increased carrying amount
must not, however, exceed the carrying amount that
would have been determined had no impairment loss
been recognised in prior years.
acquisition cost comprises raw materials, direct labor,
and other direct costs. The carrying amount of inven
-
tories is not reduced to a value that is less than its
acquisition cost, as TVO operates at cost price, so the
net realisable value of inventories always covers their
acquisition cost. The cost of supplies is determined
by using the rolling weighted average cost formula.
The use of nuclear fuel is recognised according to
calculated consumption.
FINANCIAL ASSETS
In the Group, financial assets are divided into the
following categories in accordance with the IFRS 9
standard: assets measured at fair value through profit
or loss, at fair value through other comprehensive
income items, and at amortised cost. According to the
standard, the classification is based on the business
goal of the financial assets and contractual cash flows,
and they are classified during their original acquisition.
Transaction expenses are included in the original
book value of the financial liabilities, except in the
case of items measured at fair value through profit or
loss. All purchases and sales of financial assets are
recognised at fair value on their trade date.
Financial assets are derecognised once the Group
has lost its contractual right to the cash flows or
transferred a significant portion of the risks and
revenue out of the Group.
Recognised at fair value through profit or loss
Derivative financial instruments that do not meet the
criteria for hedge accounting of the IFRS 9 standard
are recognised at fair value through profit or loss.
Profit and loss resulting from changes in fair value
are recognised in the income statement in the finan
-
cial period during which they have arisen. However, if
expenses or income resulting from derivative finan
-
cial instruments are caused by the construction of the
OL3 power plant, they are activated as part of the
acquisition cost of the asset.
Amortised cost
Amortised cost includes non-current loan and other
receivables, as well as current trade and other
receivables. If an item is due in over 12 months, it is
recognised as a non-current asset. After initial recog
-
nition, all loan and other receivables are measured at
amortised cost using the effective interest method.
Trade receivables are recognised on the balance
sheet at their transaction price, which corresponds to
their fair value.
Fair value through other comprehensive income items
Share investments are included in the “Non-current
asset investments in shares” class and recognised at
fair value through other comprehensive income items.
Changes in fair value are entered in other compre
-
hensive income items and presented in the equity fair
value reserve.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances,
call deposits and other short-term, liquid invest
-
ments. Items classified as cash and cash equivalents
have a maturity of no more than three months from
the date of acquisition.
Impairment of financial assets
According to the impairment model, the impairment
of financial assets must be determined using a model
based on expected credit losses. From the Group’s
perspective, the impairment model applies to trade
receivables and recognition of their credit losses.
According to the IFRS 9 standard, the Group applies
a simplified provision matrix for recognising the
REPORT OF THE BOARD OF DIRECTORS AND FINANCIAL STATEMENTS 2022
35
REPORT OF THE BOARD OF DIRECTORS KEY FIGURES GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS FINANCIAL INFORMATION