National Grid 2014 Annual Report Download - page 124

20. Trade and other payables
Trade and other payables includes amounts owed to suppliers, tax authorities and other parties which are due to be settled within
12months. The total also includes deferred income, which represents monies received from customers but for which we have not
yetcompleted the associated service. These amounts are recognised as revenue when the service is provided.
Trade payables are initially recognised at fair value and subsequently measured at amortised cost.
2014
£m
2013
£m
Trade payables 1,942 2,033
Deferred income 224 155
Commodity contract liabilities 77 69
Social security and other taxes 146 131
Other payables 642 663
3,031 3,051
Due to their short maturities, the fair value of trade and other payables approximates their book value. Commodity contract liabilities are
recorded at fair value. All other trade and other payables are recorded at amortised cost.
21. Other non-current liabilities
Other non-current liabilities includes deferred income which will not be recognised as income until after 31 March 2015. It also
includes payables that are not due until after that date.
2014
£m
2013
£m
Deferred income 1,605 1,579
Commodity contract liabilities 46 70
Other payables 190 235
1,841 1,884
Commodity contract liabilities are recorded at fair value. All other non-current liabilities are recorded at amortised cost. There is no material
difference between the fair value and the carrying value of other non-current liabilities.
22. Pensions and other post-retirement benefits
Substantially all our employees are members of either DB or DC pension plans. The principal UK plans arethe National Grid UK
Pension Scheme, the National Grid Electricity Group of the Electricity Supply Pension Scheme and TheNational Grid YouPlan.
IntheUS, we have a number of plans and also provide healthcare and life insurance benefits to eligible retired US employees.
The fair value of associated plan assets and present value of DB obligations are updated annually. For further details andthe
actuarial assumptions used to value the obligations, see note 29.
With the adoption of IAS 19 (revised), we have increased our disclosures by separately presenting our UK and US pension plans
toshow geographical split.
Below we provide a more detailed analysis of the amounts recorded in the primary financial statements.
For DC plans, the Group pays contributions into separate funds on behalf of the employee and has no further obligations to employees.
The risks associated with this type of plan are assumed by the member.
For DB retirement plans, members receive benefits on retirement, the value of which is dependent on factors such as salary and length
of pensionable service. The Group underwrites both financial and demographic risks associated with this type of plan.
The cost of providing benefits in a DB plan is determined using the projected unit method, with actuarial valuations being carried out
ateach reporting date by a qualified actuary. This valuation method is an accrued benefits valuation method that makes allowance
forprojected earnings.
The Group’s obligation in respect of DB pension plans is calculated separately for each plan by projecting the estimated amount of
futurebenefit payments that employees have earned for their pensionable service in the current and prior periods. These future benefit
payments are discounted to determine the present value of the liabilities and the fair value of plan assets and any unrecognised past
service cost is then deducted. The discount rate used is the yield at the valuation date on high-quality corporatebonds.
Notes to the consolidated
financial statements continued
122 National Grid Annual Report and Accounts 2013/14