Integrated report 2021

15. Inventories

ACCOUNTING RULES

Inventories

Inventories are assets held for sale in the ordinary course of business, in the process of production for sale, or in the form of materials or raw materials consumed in the production process or in the rendering of services.

Inventories comprise:

  • materials
  • products
  • work in progress
  • energy origin rights – purchased rights of origin for energy produced from renewable energy sources, rights of origin for energy relating to energy generated in cogeneration and rights to energy efficiency certificates, 
  • goods (especially CO2 emission allowances intended for re-sale). 

Inventories (except for CO2 allowances acquired to generate profits) are valued at the lower of purchase price / cost to manufacture and net realisable value.

CO2 emission allowances acquired in order to realise profits from fluctuations in market prices are measured at fair value less costs of disposal.

Cost of usage of inventories is determined as follows:

  • materials and goods (except for CO2 emission allowances) – using the FIFO method; 
  • CO2 emission allowances – using specific identification,
  • Energy origin rights – using the specific identification method.

As at reporting date, the cost of inventories cannot be higher than net realisable value. Impairment losses on inventories are recognised in operating expenses. When the realisable value of a specific item of inventory is recovered fully or partially, its carrying amount is adjusted by decreasing revaluation adjustment.

At December 31, 2021 At December 31, 2020
Initial value Impairment Net carrying amount Initial value Impairment Net carrying amount
Hard coal 499 499 963 963
Repair and maintenance materials 683 (29) 654 701 (25) 676
Mazut 50 50 29 29
Other materials 86 (13) 73 86 (16) 70
TOTAL MATERIALS 1,318 (42) 1,276 1,779 (41) 1,738
Green energy origin rights 884 (60) 824 1,269 (129) 1,140
Other energy origin rights 3 3 4 (1) 3
ENERGY ORIGIN RIGHTS 887 (60) 827 1,273 (130) 1,143
CO2, emission allowances 1 1 1 1
Hard coal 12 5 17 144 144
Other goods 11 (2) 9 19 6 25
TOTAL GOODS 24 3 27 164 6 170
OTHER INVENTORIES 61 (2) 59 72 72
TOTAL INVENTORIES 2,290 (101) 2,189 3,288 (165) 3,123

Year ended

Decmeber 31, 2021

Year ended

December 31, 2020

REVALUATION ADJUSTMENTS OF INVENTORIES AS AT JANUARY 1 (165) (207)
Recognition of an impairment loss (18) (32)
Reversal of impairment loss 81 64
Use of impairment loss 5 2
Fair value measurement (2) 20
Other changes (2) (12)
REVALUATION ADJUSTMENTS OF INVENTORIES AS AT DECEMBER 31 (101) (165)
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