Reverse factoring, policy and disclosure of amounts involved

Ferrovial S.A. – Annual report – 31 December 2018

Industry: construction

4.3 Short-term trade and other payables (extract)

The detail of “Short-Term Trade and Other Payables” at 31 December 2018 and 2017 is as follows:

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a) Trade payables

The detail of the trade payables at 31 December 2018 and 2017 is as follows:

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The line item “Trade Payables” decreased by EUR 970 million compared to the balance recognised at 31 December 2017. The main changes were due to the reclassification of Services to discontinued operations (EUR -1,065 million) and changes in the scope of consolidation (due to the acquisition of Carillion Amey, with a positive impact of EUR 104 million, and partially offset by the sale of a Construction company in Poland, amounting to a negative impact of EUR 15 million.

This line item includes the balances payable to suppliers sent for reverse factoring (see Note 1.2.3.3 on Accounting policies) amounting to EUR 209 million (31 December 2017: EUR 286 million).

Group management considers that the carrying amount of trade receivables approximates their fair value.

1.2.3.3. Other line items in the balance sheet and income statement (extract)

Trade payables

“Trade Payables” include the balances payable to suppliers under reverse factoring arrangements with banks.

These balances are classified as trade payables and the related payments as cash flows from operating activities, since the payments are made to the banks under the same conditions as those agreed with the supplier, the company bound by the obligation to make payment does not agree an extension with the financial institutions beyond the due dates agreed with the supplier, the cost of the reverse factoring is paid by the supplier, and there are no special guarantees to secure the payments to be made.

 

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