Page 94 - ENAV eng_Relazione_Finanziaria_Annuale_2014

92 ENAV – 2014 Financial Statements

Provisions for risks and charges

Provisions for risks and charges are recognized for losses and charges of a
specific nature whose existence is certain or probable but for which the
amount and/or date of occurrence cannot be determined. Provisions are only
recognized when the Group has a present obligation, legal or constructive,
arising from a past event, when it is probable that a future outflow of economic
benefits will be required to settle the obligation and when it is possible to
make a reliable estimate of that amount.

Where the financial effect of the time value of money is material and the
dates of settling the obligations can be reliably estimated, the provisions are
discounted using a pre-tax rate that reflects, where suitable, the market’s
current assessment of the time value of money and, if applicable, the risks
specific to the liability. The increase in the carrying amount of a provision as
the result of the discounting process is recognized as financial expense.

Changes in the estimates of allocations to provisions are recognized in
profit or loss in the period in which the change occurs and as an increase
in the liability. Downwards changes in estimates are recognized by making
a counter-entry to the liability up to its carrying amount, whileany excess is
recognized in profit or loss in the line item to which the provisions refer.

Amounts included in provisions for risks and charges are classified as either
current or non-current depending on the estimated date on which the liability
will be settled or extinguished.

Charge Stabilization Provision

The Charge Stabilization Provision was created under a resolution adopted
by the parent company’s shareholders on 9 May 2003 by allocating
¤72,697 thousand of the reserve for finalizing and settling tax receivables
(Law no. 289/02). This increased in subsequent years following allocations
of part of ENAV’s net income approved by the shareholders of the parent
company, andis used solely for business purposes.

The Charge Stabilization Provision falls within the scope of government
grants, as treated by IAS 20. The grant is initially recognized as a liability
(classified in “Other non-current liabilities”). This liability is then released to
income onthe determination of the charge as a means of “supplementing”
the reduced revenues earned by the parent company in the same year
through acharge stabilization process. More specifically, the Charge
Stabilization Provision is used when ENAV decides to reduce charges;in
this case a part of the costs incurred is not to passed on to carriers but
isoffset by releasing a portion of the grant recognized as a liability to income,
thereby ensuring economicity. The following points further support these
comments: