Bonds and term deposits (included in ‘Available-for-sale financial assets’) are held in part for the payment of the capital expenditure commitments of €1,437 million (€1,428 million in 2016), repayments and interest payments on the loans, and long-term provisions and liabilities.

As at year-end 2017, the ‘Loans and receivables’ included the sum of €52 million from the Ministry of Infrastructure and Water Management concerning the franchise fee correction mechanism (see note 31).

Accounting policies

On initial recognition, loans, receivables and deposits are included by the Group from the date on which they first arose. All other financial assets are first recognised on the transaction date.  The Group no longer recognises a financial asset in the balance sheet once the contractual rights to the cash flows from the asset expire, or if the Group transfers the contractual rights to the cash flows from the financial asset by means of a transaction in which virtually all risks and benefits associated with ownership of the asset are transferred or not retained, and control of the asset transferred is not retained either. If the Group retains or creates an interest in the financial assets being transferred, then that interest is included as a separate asset or liability.

The Group ceases recognition of a financial liability in the balance sheet once the contractual obligations have been fulfilled or cancelled or have expired.

Financial assets and liabilities are netted and the resulting net amount recognised in the balance sheet only if the Group has a legally enforceable entitlement to netting and if it intends to net the amounts or to realise the asset and the liability simultaneously.

The Group uses the following financial instruments.

Non-derivative financial instruments

Non-derivative financial instruments include investments in equity securities, deposits and bonds, trade and other receivables, cash and cash equivalents. Non-derivative financial instruments are initially recognised at fair value. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

Available-for-sale financial assets

The Group's investments in certain bonds and deposits are classified as available-for-sale financial assets. Subsequent to initial recognition, these assets are measured at fair value, and any changes in the fair value, other than impairment losses and exchange rate gains and losses on available-for-sale monetary items, are recognised directly in equity via the comprehensive income. Attributable transaction costs are charged to the income statement when they are incurred. When an investment ceases to be recognised in the balance sheet, the cumulative profit or loss in equity is transferred to the income statement.

If no information is available for determining the fair value, the assets are measured at cost.

Held-to-maturity financial assets

If the Group has the express intent and ability to hold financial assets to maturity, they are measured at amortised cost plus any directly attributable transaction charges, using the effective interest method, less any impairment losses.

Other non-derivative financial instruments (loans and receivables, finance leases and other non-current financial assets)

On initial recognition, these instruments are valued at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are valued at amortised cost using the effective interest method.

Impairments of financial assets

Financial assets are assessed at each reporting date to determine whether there is objective evidence of any impairment. A financial asset is considered to be impaired if there is objective evidence indicating that one or more events have had a negative effect on the projected future cash flows of that asset.

An impairment loss on a financial asset stated at amortised cost is calculated as the difference between the carrying amount and the present value of the projected future cash flows, discounted using the original effective interest rate. An impairment loss on an available-for-sale financial asset is calculated using the fair value.

Significant financial assets are assessed individually for impairment. The remaining financial assets are grouped into comparable credit risk groups and assessed collectively.

All impairment losses are charged to the income statement. Any cumulative loss on an available-for-sale financial asset that was recognised previously in equity is transferred to the income statement.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets in the form of bonds, the reversal is credited to the income statement.

The Group's credit risks, currency risks and interest rate risks associated with the other investments are explained in more detail in note 26.