Tools
ACCOUNTING POLICIES
Inventories
Inventories are assets held for sale in the ordinary course of business, assets in the production process for sale and materials and supplies that are consumed in production or during the provision of services.
Inventories include:
Inventories (except for CO2 emission allowances acquired in order to realise gains) are measured at the lower of cost and net realisable value.
Allowances acquired in order to realise gains from changes in market prices are recognised at fair value less costs to sell.
The cost of inventories is measured in accordance with the following rules:
As at reporting date, the cost of inventories cannot be higher than their net realisable value. Inventory write-downs are recognised under other operating expenses. When the realisable value of a specific item of inventory is recovered fully or partially, its carrying amount is adjusted by decreasing the write-down.
| As at December 31, 2019 | As at December 31, 2018 | |||||
|---|---|---|---|---|---|---|
| Initial value | Revaluation | Net carrying amount | Initial value | Revaluation | Net carrying amount | |
| Hard coal | 1,077 | – | 1,077 | 959 | – | 959 |
| Materials for repairs and operations | 660 | (32) | 628 | 683 | (43) | 640 |
| Mazut | 43 | – | 43 | 52 | – | 52 |
| Other materials | 70 | (14) | 56 | 59 | (13) | 62 |
| TOTAL MATERIALS | 1,850 | (46) | 1,804 | 1,769 | (56) | 1,713 |
| Green property rights | 1,254 | (158) | 1,096 | 736 | (160) | 576 |
| Yellow property rights | – | – | – | 171 | (2) | 169 |
| Other property rights | 77 | (1) | 14 | 15 | (1) | 14 |
| ENERGY ORIGIN RIGHTS | 1,331 | (159) | 1,172 | 922 | (163) | 759 |
| CO2 emission allowances | 1,303 | – | 1,303 | 4 | – | 4 |
| Hard coal | 125 | – | 125 | 140 | – | 140 |
| Other goods | 28 | (2) | 26 | 17 | (2) | 15 |
| TOTAL GOODS | 1,456 | (2) | 1,454 | 161 | (2) | 159 |
| OTHER INVENTORIES | 79 | – | 79 | 68 | – | 68 |
| TOTAL INVENTORIES | 4,716 | (207) | 4,509 | 2,920 | (221) | 2,699 |
| Year ended December 31, 2019 |
Year ended December 31, 2018 |
|
|---|---|---|
| REVALUATION OF INVENTORIES AS AT JANUARY 1 | (221) | (205) |
| Recognition of write-downs | (10) | (36) |
| Reversal of write-downs | 19 | 14 |
| Utilisation of write-downs | 1 | 5 |
| Other changes | 4 | 1 |
| REVALUATION OF INVENTORIES AS AT DECEMBER 31 | (207) | (221) |
As described in note 33.3 to these consolidated financial statements, the CO2 emission allowances include EUAEUA resulting from the additional allocation of the CO2 emission allowances for 2013-2017. The allowances are measured at each reporting date at fair value. As at December 31, 2019, their fair value amounted to PLN 1,300 million. These allowances are held for trading purposes.
As described in note 25.5 to these financial statements, inventories in the amount of PLN 14 million were pledged as collateral for repayment of liabilities or contingent liabilities.
