Joint ventures: property development joint arrangements contractualised in France in the form of sociétés civiles de construction-vente (SCCVs) are joint ventures under IFRS 11 and therefore accounted for under the equity method. The same is true of the Group’s other joint arrangements taking place through an entity with legal personality and whose production is not intended solely for the parties to the joint arrangement.
Associates are entities over which the Group exerts significant influence. They are accounted for under the equity method in accordance with IAS 28. Significant influence is presumed where the Group’s stake is more than or equal to 20%. However, it may arise where the ownership interest is lower, particularly where the Group is represented on the board of directors or any other governance body, and therefore takes part in determining the entity’s operational and financial policies and strategy. This applies mainly to the Group’s stakes in the concession company for Budapest airport and DEME, companies where VINCI is represented on the board of directors.
The holding companies of London Gatwick and Edinburgh airports and that of Mexican airport operator OMA have material non-controlling interests (49.99% for London Gatwick and Edinburgh airports and 70.01% for OMA). The information required by IFRS 12 regarding non-controlling interests is provided in Note I.23.5, “Non-controlling interests”. VINCI does not own any interest in structured entities as defined by IFRS 12.
VINCI’s consolidated financial statements include the financial statements of all companies with revenue of more than €2 million, and of companies whose revenue is below this figure but whose impact on certain of the Group’s balance sheet and income statement indicators is material.
In accordance with Regulation 2016-09 of 2 December 2016, issued by the Autorité des Normes Comptables (ANC, the French accounting standards authority), the list of companies included in the consolidation scope and shares in unconsolidated subsidiaries and affiliates is available on VINCI’s website at https://www.vinci.com/vinci.nsf/en/investors-composition-group.htm.
The preparation of financial statements in accordance with IFRSs requires estimates to be used and assumptions to be made that may affect the amounts recognised in those financial statements. Against a background of interest rate and inflation volatility, the Group has carried out an in-depth examination of these assumptions and estimates.
The estimates involved are made on a going concern basis in light of the Group’s liquidity and order book. They reflect information available at the time and may be revised if the circumstances on which they were based change or if new information is obtained.
The consolidated financial statements for the period have been prepared with reference to the immediate environment, in particular as regards the estimates given below.
For revenue and income or losses on construction and service contracts, the Group applies general revenue recognition rules based on progress towards completion.
Progress towards completion and the revenue to be recognised are determined on the basis of a large number of estimates made by monitoring the work performed. Adjustments may be made to initial estimates throughout contracts and may materially affect future results.
For a given project, incurred costs that do not contribute to its completion (costs of significant inefficiencies such as the unexpected costs of losses of materials, labour hours expended or other resources consumed) are not included in measuring progress towards completion and do not therefore generate revenue.
Business combinations are recognised according to IFRS 3 “Business Combinations” and IFRS 10 “Consolidated Financial Statements”. When the Group acquires control over a company, the impact of the business combination is measured and recognised using the acquisition method.
Assets and liabilities are measured at fair value at the date of acquisition except for those that fall within the scope of IAS 12 “Income Taxes” and IAS 19 “Employee Benefits”. To measure the fair value of identifiable assets and liabilities, assumptions and estimates must be formulated.
The assumptions and estimates made to determine the value of right-of-use assets in respect of leases and the associated liabilities relate in particular to discount rates and lease terms.
The Group takes into account all economic facts and circumstances of which it is aware when determining the non-cancellable period of leases and ensures that this period is not shorter than the amortisation period of non-removable leasehold improvements.
Amortisation calculated using the unit of production method applies mainly to concession intangible assets at VINCI Airports and VINCI Highways, and to quarrying rights at VINCI Construction. This amortisation method is based on physical indicators such as passenger numbers at VINCI Airports, traffic levels at VINCI Highways and volumes of aggregates extracted at VINCI Construction.
The assumptions and estimates made to determine the recoverable amount of goodwill, intangible assets and property, plant and equipment relate in particular to the assessment of market prospects needed to estimate the cash flow, and the discount rates adopted. Any change in these assumptions could have a material effect on the recoverable amount. The main assumptions used by the Group are described in Note E.9, “Goodwill and goodwill impairment tests” and Note H.17, “Other intangible assets and property, plant and equipment”.
