Standards and interpretations mandatorily applicable from 1 January 2021 had no material impact on VINCI’s consolidated financial statements at 31 December 2021.
On 27 August 2020, as part of the interest rate benchmark reform, the IASB published amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. The text, adopted by the European Union on 13 January 2021, is retrospectively applicable from 1 January 2021. VINCI has set up a working group bringing together all departments concerned (Cash Management and Financing, Budgets and Consolidation, Legal, Information Systems) in order to identify the impacts of this reform and anticipate any consequences as effectively as possible. These developments are described in greater detail in Note J.27, “Financial risk management”.
The IFRS IC was asked to consider the method for calculating obligations relating to defined benefit plans in which the attribution of benefit is determined by an employee’s presence within the Group at the time he/she retires and whose benefits are capped at a certain length of service.
In its decision, the IFRS IC concluded that no benefit is earned if the employee leaves before reaching retirement age and that the obligation must only be recognised over the final years of the employee’s career.
As a result, the Group revised its actuarial calculation method for the plans concerned (mainly under the collective agreement for the construction industry) and analysed the accounting treatment in view of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”. This policy has been applied retrospectively and adjustments have been made to the prior year consolidated financial statements, including the related notes. The impact on expenses for 2020 was not material. The impact on balance sheet items at 1 January 2020 is presented below.
| (in € millions) | 31/12/2019 reported | IAS 19 impact | 01/01/2020 adjusted |
|---|---|---|---|
| Consolidated reserves | Consolidated reserves 31/12/2019 reported 9,252 |
Consolidated reserves IAS 19 impact 148 |
Consolidated reserves 01/01/2020 adjusted9,400 |
| Equity attributable to non-controlling interests | Equity attributable to non-controlling interests 31/12/2019 reported 2,604 |
Equity attributable to non-controlling interests IAS 19 impact 1 |
Equity attributable to non-controlling interests 01/01/2020 adjusted2,605 |
| Total equity | Total equity 31/12/2019 reported 23,042 |
Total equity IAS 19 impact 149 |
Total equity01/01/2020 adjusted23,191 |
| Provisions for employee benefits | Provisions for employee benefits 31/12/2019 reported 1,911 |
Provisions for employee benefits IAS 19 impact (198) |
Provisions for employee benefits 01/01/2020 adjusted1,713 |
| Deferred tax liabilities | Deferred tax liabilities 31/12/2019 reported 2,701 |
Deferred tax liabilities IAS 19 impact 48 |
Deferred tax liabilities 01/01/2020 adjusted2,749 |
| Total non-current liabilities | Total non-current liabilities 31/12/2019 reported 34,610 |
Total non-current liabilities IAS 19 impact (149) |
Total non-current liabilities01/01/2020 adjusted34,461 |
| Total equity and liabilities | Total equity and liabilities 31/12/2019 reported 91,159 |
Total equity and liabilities IAS 19 impact - |
Total equity and liabilities01/01/2020 adjusted91,159 |
The Group has not applied early the following standards and interpretations that could concern the Group and of which application was not mandatory at 1 January 2021:
A study of the impacts and practical consequences of applying these provisions is under way, although at the outset they do not seem to be contrary to the Group’s current accounting practices.
The Group is also looking at the practical impacts and consequences of the final agenda decision issued by the IFRS IC in the first half of 2021 concerning recognition of the cost of configuring and customising software provided in the cloud as part of a software as a service (SaaS) agreement. The agreements that may be concerned are currently being analysed. At this stage, no material impact on the Group’s financial statements is expected.
In accordance with IFRS 10, companies in which the Group holds, whether directly or indirectly, the majority of voting rights in shareholders’ general meetings, in the boards of directors or in the equivalent management bodies, giving it the power to direct their operational and financial policies, are deemed to be controlled and are fully consolidated. To determine control, VINCI carries out an in-depth analysis of the established governance arrangements and of the rights held by other shareholders.
Where necessary, an analysis is performed in relation to instruments held by the Group or by third parties (potential voting rights, dilutive instruments, convertible instruments, etc.) that, if exercised, could alter the type of influence exerted by each party.
For some infrastructure project companies operating under public-private partnership (PPP) contracts and in which VINCI is not the only capital investor, in addition to the analysis of the governance arrangements with each partner, the Group may look at the characteristics of subcontracting contracts to check that they do not confer additional powers that could lead to a situation of de facto control. This generally concerns construction contracts and contracts to operate/maintain concession assets. An analysis is performed if a specific event takes place that may affect the level of control exerted by the Group, such as a change in an entity’s ownership structure or governance, or the exercise of a dilutive financial instrument.
In accordance with IFRS 11, the Group’s joint arrangements fall into two categories (joint operations and joint ventures) depending on the nature of the rights and obligations held by each party. Classification is generally determined by the legal form of the project vehicle. The Group has joint control over all of these joint arrangements.
