The scope and accounting principles of the consolidated financial statements
EPV Energy Group consists of EPV Energy Ltd and its subsidiaries. The registered domicile of the Group’s parent company, EPV Energy Ltd, is Vaasa. The consolidated financial statements incorporate all the subsidiaries and affiliated companies, excluding Voimapiha Oy.
EPV Energy Ltd owns all the Series A shares of Suomen Energiavarat Oy. Suomen Energiavarat Oy’s financial statements have not been incorporated into the consolidated financial statements, since the company was established for a specific purpose and the Series A shares EPV Energy Ltd owns do not entitle it to any dividends. The affiliated company Voimapiha Oy has also not been incorporated into the consolidated financial statements, because the Series A shares EPV Energy Ltd owns do not entitle it to any dividends.
The subsidiaries have mainly been established by the parent company and have been incorporated in accordance with the acquisition cost method. The only exception is the online business Vaskiluodon Teollisuuskiinteistöt Oy, which has been incorporated in accordance with the equity method. The portion of the purchase price paid for this subsidiary which exceeds equity (difference on consolidation) at the time of acquisition has been allocated to the transmission network.
The Group’s internal transactions and internal assets and liabilities have been eliminated.
Minority interests have been separated from the result for the financial year and equity and are presented as a separate item in the income statement and balance sheet.
The accumulated depreciation difference has been divided into non-restricted equity and deferred tax liabilities. The change in depreciation in the income statement has been divided into the result for the financial year and the change in deferred tax liabilities.
The affiliated companies have been incorporated in accordance with the equity method. A share of the affiliated company’s result and change in depreciation (less deferred tax liabilities) equivalent to the Group’s interest is included in the income statement.
In the balance sheet, the share of the affiliated company’s equity and the accumulated depreciation, less deferred tax liabilities, are presented as share value.
Non-current assets
Non-current assets are entered in the balance sheet under the original acquisition cost, less contributions received and scheduled depreciation and amortisation. The revaluations aimed at land areas have been adjusted during the financial year. Planned depreciations are calculated according to the asset’s expected economic life.
| The depreciation periods are: | |
|---|---|
| Intangible rights (main grid connection fees) | 20 years |
| Other long-term expenses | 5–40 years |
| Goodwill | 5–15 years |
| Buildings and structures | 5–30 years |
| Machinery and equipment | 5–52 years |
| Transmission and distribution network | 30 years |
The share of wasteland and standing crop in the direct acquisition costs of bog areas intended for peat production are entered under item land. The remaining direct acquisition costs of bog areas are recognised under peat resources and peat purchases in progress.
Once the bog area is complete, the pending peat acquisitions of the area which has been granted a permit are entered as peat resources, and these resources are depreciated under the machine hour method of depreciation.
The expenses directly linked to wind power projects are entered under purchases in progress. They are part of the preparation process for investments. The prerequisites for completing the projects are investigated annually and separately for each project.
Valuation of inventories
Inventories are mainly evaluated as direct acquisition costs according to the FIFO principle. Should the probable acquisition cost of the inventories be lower than the original acquisition cost on the date of the financial statements, the difference is not entered as a cost due to the absorption costing principle.
Emission reductions and allowance
The acquisition of emission reductions and the associated indirect costs are recognised under intangible rights in item emission reductions. Emission allowances received free of charge are assets not included in the balance sheet.
Feed-in tariff system
The feed-in tariff system covers the power generation subsidy, or feed-in tariff, which fluctuates based on the electricity market price paid to wind, biogas, wood chip and wood-based fuel power plants or on the emission allowance price.
The subsidies granted based on the feed-in tariff system are recognised in the company’s turnover.
Derivatives management
The interest rate tying period of the floating-rate loans has been extended with interest rate swap agreements, using hedge accounting principles. The derivative agreements have not been recognised in the balance sheet. Derivatives used to manage interest rate risk have been accrued for the agreement period and they have been recognised against the interest expenses of the hedged loans. The nominal values, fair values and other key figures of the derivative instruments are presented in the notes.
Pension cover
The pension cover of the company’s personnel is taken care of by an external pension insurance company.
