UPM Annual Report 2017

Accounts

In brief

Strategy

Businesses

Stakeholders

Governance

Financial assets and liabilities by category at the end of 2017

Leases UPM has three finance lease agreements regarding power plant machinery outstanding at the end of 2017. The group uses the energy generated by these plants for its own production. The group also has a finance lease arrangement over the usage of a waste water treatment plant. In addition, the group leases certain production assets and buildings under long term lease arrangements.

FAIR VALUE THROUGH PROFIT AND LOSS

AVAILABLE-FOR- SALE FINANCIAL ASSETS

DERIVATIVES USED FOR HEDGING

FINANCIAL LIABILITIES AT AMORTISED COST

LOANS AND RECEIVABLES

EURm

TOTAL 1,974

Energy shareholdings

–

1,974

–

–

–

Other non-current financial assets: Loans and receivables

– 2

– –

16

–

– –

16

Derivatives

–

175

176 192

Trade and other receivables Other current financial assets: Loans and receivables

–

–

1,783

–

–

1,783

Leased assets included in property, plant and equipment

–

– –

5 –

–

– –

5

Derivatives

21

66

87 92

EURm

2017

2016

Accumulated costs

152 –58

154 –59

Total financial assets

23

1,974

1,803

240

–

4,041

Accumulated depreciation

Carrying value, at 31 December

94

95

Non-current debt: Loans

– –

– –

– –

– –

789

789 – 789

The group also leases office, manufacturing and warehouse space through various non-cancellable operating leases. Certain contracts contain renewal options for various periods of time.

Derivatives

–

Other non-current financial liabilities: Other liabilities 1)

– 8

– –

– –

– 1

85

85 9 94

Derivatives

–

Future minimum lease payments

Current debt: Loans

Finance leases

Operating leases

–

– –

– –

– –

311

311 13 324

EURm

2017

2016

2017

2016

Derivatives

13

–

Within 1 year

8

94 73 40

77

74

Between 1 and 5 years

69 32

203 183 463

189 185 448

Trade and other payables

–

–

–

–

1,765

1,765

Later than 5 years

Other current financial liabilities: Derivatives

Total

110

207 –12 195

15

–

–

19

–

34 34

Of which interest

–6

– –

– –

Present value of future minimum lease payments

105

Total financial liabilities

36

–

–

20

2,951

3,006

Financial assets and liabilities by category at the end of 2016

FAIR VALUE THROUGH PROFIT AND LOSS

AVAILABLE-FOR- SALE FINANCIAL ASSETS

DERIVATIVES USED FOR HEDGING

FINANCIAL LIABILITIES AT AMORTISED COST

LOANS AND RECEIVABLES

EURm

TOTAL 1,932

Energy shareholdings

–

1,932

–

–

–

Other non-current financial assets: Loans and receivables

Accounting policies

5.3 Financial assets and liabilities by category Financial assets and liabilities recognised in the balance sheet include cash and cash equivalents, loans and other financial receivables, investments in securities, trade receivables, trade payables, loans and derivatives. Classification of financial assets into different measurement categories depends on the purpose for which the financial assets were initially acquired and is determined at the acquisition date. Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

–

– –

19

–

– –

19

Derivatives

18

–

218

236 255

Trade and other receivables Other current financial assets: Loans and receivables

–

–

1,726

–

–

1,726

Leases Leases of property, plant and equipment where the group, as a lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognised as assets and liabilities in the balance sheet at the commencement of lease term at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in other non-current debt. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term. Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Payments made as a lessee under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

–

– –

6 –

–

– –

6

Derivatives

47

56

103 109

Total financial assets

65

1,932

1,751

274

–

4,022

Non-current debt: Loans

– –

– –

– –

–

1,800

1,800 34 1,835

Derivatives

34

–

Other non-current financial liabilities: Other liabilities 1)

–

– –

– –

– 6

94

94

Derivatives

10

–

16 110

Current debt: Loans

–

– –

– –

– –

502

502 82 584

Derivatives

82

–

Trade and other payables

–

–

–

–

1,594

1,594

Other current financial liabilities: Derivatives

20

–

–

96

–

116 116

Total financial liabilities

112

–

–

136

3,990

4,238

1) Consists mainly of non-current advances received and a put liability that is not estimated to mature within 12 months.

CONTENTS

ACCOUNTS

144

145

UPM Annual Report 2017

UPM Annual Report 2017