1.3 Significant estimation uncertainties and judgements
The preparation of the consolidated financial statements requires the management to exercise judgement and make estimates and assumptions. These can significantly affect recognised assets and liabilities, reported income and expenses and disclosures. Estimates and assumptions are based on historical experience and expectations of future events that are believed to be reasonable under the circumstances. Actual amounts may differ from these estimates. Any revisions to estimates and assumptions are recognised and disclosed in the period in which they are identified.
The explanations on significant estimation uncertainties and judgements are highlighted in colour. They are contained in notes 2.2 Net revenue, 2.7 Income tax, 3.2 Financial instruments, 3.6 Leases, 4.1 Property, plant and equipment, 4.2 Intangible assets, 4.7 Provisions, 4.8 Contingent liabilities and guarantees, 5.1 Companies sold and 6.3 Employee benefits.
Impact of the COVID-19 pandemic on Alpiq
The coronavirus and the disease it causes (COVID-19) have been spreading on a global scale since the beginning of 2020, repeatedly forcing governments to take drastic protective measures. The spread of COVID-19 and the protective and stimulation measures taken by governments and central banks are having far-reaching effects on the macroeconomic environment.
The Alpiq Group has been left largely unscathed by the negative financial impact of the pandemic. Although wholesale prices initially declined in the first half of 2020, they recovered again during the second half of the year. Prices rose considerably in 2021 and are now significantly up on the level seen before the pandemic.
Alpiq regularly monitors the development of the pandemic as well as its potential effects, and takes the necessary measures. Certain effects are indirectly reflected in the 2021 consolidated financial statements via macroeconomic assumptions used to make estimates, such as interest rate, exchange rate and wage developments. Furthermore, Alpiq does not expect the pandemic to have any significant impact on the financial position, financial performance and cash flows of the Group.