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2022 ANNUAL REPORT |\u00a0TERNA S.P.A. AND TERNA GROUP
INTEGRATED REPORT
CONSOLIDATED FINANCIAL STATEMENTS
GREEN BOND REPORT 2022
SEPARATE FINANCIAL STATEMENTS
Basis of presentation
The consolidated financial statements consist of the statement of financial position, the income statement, and the statement of comprehensive income, the statement of cash flows, the statement of changes in equity and the notes thereto.
In the statement of financial position, assets and liabilities are classified on a \u201ccurrent/non-current\u201d basis, with separate reporting of assets and liabilities held for sale. Current assets, which include cash and cash equivalents, are those held for realisation, sale or consumption in the Group\u2019s normal operating cycle; current liabilities are those expected to be settled in the Group\u2019s normal operating cycle or within one year of the end of the financial year.
The income statement is classified on the basis of the nature of costs. The income statement is presented as two statements, the first of which (the income statement) presents revenue and expense items for the year; the second (the statement of comprehensive income) starts with the result for the year and then presents the revenue and expense items that are recognised in equity rather than profit or loss for the year.
The statement of cash flows has been prepared using the indirect method.
The consolidated financial statements are accompanied by the Integrated Report for Terna S.p.A. and the Group, which as from financial year 2008 has been prepared as a single document, exercising the option granted by Legislative Decree 32 of 2 February 2007, which amended art. 40 (Report on Operations) of Legislative Decree 127 of 9 April 1991.\u2028From 2021, the Terna Group\u2019s Annual Financial Report contains the Integrated Report, including in a single document the Report on Operations, the Sustainability Report and the Consolidated Non-financial Statement (the \u201cNFS\u201d), in addition to the consolidated financial statements and the Parent Company\u2019s separate financial statements.
These consolidated financial statements are presented in millions of euros and all amounts are shown in millions of euros to the first decimal place, unless otherwise indicated.\u2028
Given that the requirements of IFRS 5 have been met, the total results for 2022 and 2021 attributable to the South American subsidiaries included in the planned sale of assets have been classified in the item \u201cProfit/(Loss) for the year from discontinued operations and assets held for sale\u201d in the Group\u2019s consolidated income statement. Likewise, the attributable assets and liabilities at 31 December 2022 and 2021 have been classified in the item \u201cDiscontinued operations and assets held for sale\u201d and \u201cLiabilities related to discontinued operations and assets held for sale\u201d in the Group\u2019s consolidated statement of financial position.
Certain amounts in the financial statements at and for the year ended 31 December 2021 have been restated in order to provide an improved basis of comparison, without however modifying the amount of equity at 31 December 2021 or amounts in the income statement and statement of comprehensive income for 2021.
Use of estimates
Preparation of the consolidated financial statements requires the Group to use estimates and assumptions that affect the carrying amounts of assets and liabilities and the related disclosures, in addition to contingent assets and liabilities at the reporting date. The estimates are made on the basis of the information available to the management at the date of preparation of the financial statements. These estimates and the associated assumptions are based on previous experience and various factors that are believed to be reasonable under the circumstances. The resulting estimates form the basis for making the judgements about the carrying amounts of assets and liabilities that are not readily apparent from other objective sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed periodically and the effects of any changes are recognised in the income statement for the year, if they relate solely to that period. In the case that the revision affects both current and future years, the change is recorded in the year in which the estimate is reviewed as well as in the relevant future years.
The assets and liabilities subject to estimates and key assumptions used by the Group in applying the IFRS endorsed by the European Commission, and that could have a significant impact on the consolidated financial statements, or that could give rise to risks that would entail significant adjustments to the carrying amounts of assets and liabilities in subsequent years, are summarised below.