3.1. Revenue

Estimating natural gas sales

In order to correctly recognise revenue from gas sales in appropriate reporting periods, at the end of each reporting period the Group estimates the quantity and value of gas delivered to retail customers but not invoiced.

The value of natural gas supplied to retail customers but not invoiced is estimated on the basis of the customers’ historical consumption patterns in comparable reporting periods. The value of estimated gas sales is calculated as the product of quantities assigned to the individual tariff groups and the rates defined in the applicable tariff. There is a risk that the actual final volume of gas fuel sold might differ from the estimate. Accordingly, profit or loss for a given period may account for a portion of the estimated sales volume which will never be realised.

At the end of 2016, an estimated amount of PLN 103m was included in gas sales revenue (adjustment increasing the invoiced revenue), while gas sales revenue for 2015 was reduced by PLN 183m relative to the invoiced amounts.

Revenue from sale of crude oil

With regard to sales of crude oil produced from the Norwegian Continental Shelf, where the Group holds interests in licences together with other entities, the revenue from sale of crude oil is recognised based on crude volumes produced and sold to customers. However, the volume of crude oil sold to customers may differ from the volume of crude which is attributable to the Group in a given period based on its interest in a given licence. If the production volume attributable to the Group is higher than the sales volume, an asset (underlift) is recognised in the consolidated financial statements. Conversely, if in a given reporting period the volume of crude oil sold exceeds the production volume the Group is entitled to, a liability (overlift) is recognised in the consolidated financial statements.

At the end of 2015 and 2016 the volume of crude oil sold was lower than the Group’s share of production. Therefore, an asset of PLN 18.1m and PLN 7m, respectively, was recognised under receivables in the consolidated statement of financial position.

Revenue from construction contracts

If the outcome of a construction contract can be estimated reliably, revenue and costs should be recognised in proportion to the stage of completion of contract activity at the end of the reporting period. If the outcome cannot be estimated reliably, contract revenue should be recognised only to the extent that contract costs incurred are expected to be recoverable.