Special Features of Construction Companies' Financial Statements

Sales

For HOCHTIEF Group reporting in line with IFRS, the following has to be observed: Sales chiefly comprise contract income from long-term construction contracts which are reported by using the percentage of completion method. Profit is realized in line with the percentage of completion of non-invoiced works. This profit is determined on the basis of the ratio of incurred contract costs divided by the total target costs (cost-to-cost method).

Losses from long-term construction contracts are accounted for in the balance sheet irrespective of the achieved percentage of completion as soon as they appear. In addition, sales comprise contract values of invoiced own contracts, trade receivables from construction joint ventures and pro-rata shares of profits from construction joint ventures, as well as other work not invoiced by using the percentage of completion method.