Alliander’s financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as at 31 December 2023, as adopted by the European Union (EU), and the provisions of Title 9, Book 2 of the Dutch Civil Code. IFRS consists of the IFRS standards as well as the International Accounting Standards issued by the International Accounting Standards Board (IASB) and the interpretations of IFRS and IAS standards issued by the IFRS Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC), respectively.

The significant accounting policies used in the preparation of the consolidated financial statements are set out below. The historical cost convention applies. However, certain assets and liabilities, including derivatives, are measured at fair value. Unless stated otherwise, these accounting policies have been applied consistently to the years covered in these financial statements.

The preparation of financial statements requires the use of estimates and assumptions based on experience and considered appropriate by management given the specific circumstances. These estimates and assumptions have an impact on the carrying amounts and presentation of the reported assets and liabilities, the off-balance sheet rights and obligations and the reported income and expenditure during the year. The actual outcomes may differ from the estimates and assumptions used. Note 35 to the financial statements gives further information on the areas and items in the financial statements where estimates and assumptions are used. Unless stated otherwise, all amounts reported in these financial statements are in millions of euros.

Unrealised profits on transactions between the Alliander group and its associates or joint ventures are eliminated pro rata according to the group’s interest in the entity concerned. Unrealised losses are also eliminated, unless the transaction gives rise to the recognition of impairment losses. If appropriate, the accounting policies of associates and joint ventures are adjusted to ensure the consistent application of accounting policies throughout the Alliander group.

New and/or amended IFRS standards applicable in 2023

The IASB has issued new and amended standards that are applicable to Alliander with effect from the 2023 financial year. The new standards and amendments to standards listed below have been endorsed by the European Union.

Amendment to IAS 12 Income taxes: ‘International Tax Reform – Pillar Two Model Rules’

On 31 December 2023, the 2024 Minimum Tax Rate Act (Wet minimumbelasting 2024) came into force, pursuant to Directive (EU) 2022/2523 and based on the OECD/G20 Pillar 2 rules. Under the legislation, multinational groups, which have a revenue of €750 million or more according to the consolidated financial statements of the ultimate parent, must be subjected to a minimum effective tax rate of 15% per jurisdiction. If this tax burden is lower, an additional amount of tax (top-up tax) may be charged.

The 2024 Minimum Tax Rate Act is applicable to Alliander N.V. since the revenue according to the consolidated financial statements of the group’s ultimate parent, Alliander N.V., is €750 million or more in at least two of the four reporting years prior to the 2024 financial year.

Analysis shows that for all group companies in the Netherlands, Germany, Belgium and Sweden, based on the available financial data, the temporary safe harbour rules (rules to ease compliance obligations) can be used in the 2024 financial year, which would result in zero top-up tax.

Under an amendment to IAS 12, a temporary, mandatory exemption applies to accounting for deferred taxes resulting from the introduction of the global minimum tax rate. This is intended to prevent different interpretations of how Pillar 2 should be applied and to avoid possible effects on the deferred taxes in the financial statements. How long this exemption will remain in force is not yet known. Alliander will continue to assess the impact of the Pillar 2 legislation under the 2024 Minimum Tax Rate Act on its future financial performance.

Other new or amended standards in 2023

  • New: IFRS 17 ‘Insurance Contracts’

  • Amendment to IFRS 17 Insurance Contracts: ‘Initial Application of IFRS 17 and IFRS 9 – Comparative Information’

  • Amendment to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: ‘Disclosure of Accounting policies’

  • Amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: ‘Definition of Accounting Estimates’

  • Amendment to IAS 12 Income taxes: ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’.

This new standard and these amendments to standards do not have any material impact on Alliander and/or their relevance is either zero or very limited so they will not be discussed further in these financial statements.

Expected changes in accounting policies

In addition to the aforementioned new and amended standards, the IASB has issued amended standards, which will be applicable to Alliander in subsequent financial years. These standards can only be applied if adopted by the European Union.

The future amended standards are the following:

  • Amendment to IAS 1 Presentation of Financial Statements: ‘Classification of Liabilities as Current or Non-current’ and ‘Non-current liabilities with Covenants’

  • Amendment to IFRS 16 Leases: ‘Lease Liability in a Sale and Leaseback’

  • Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments - Disclosures: ‘Supplier Finance Arrangements’

  • Amendment to IAS 21 The Effects of Changes in Foreign Exchange Rates: ‘Lack of Exchangeability’.

These published future amendments to standards are not relevant or have very limited relevance to Alliander and/or do not have any material impact on Alliander so they will not be discussed further in these financial statements.