Nokia 2004 Annual Report Download - page 146
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Notes to the Consolidated Financial Statements (Continued)
4. Percentage of completion
Contract sales recognized under the cost-to-cost method of percentage of completion accounting
were approximately EUR 5.2 billion in 2004 (EUR 4.8 billion in 2003 and EUR 5.9 billion in 2002).
Billings in advance of contract revenues, included in prepaid income, were EUR 185 million at
December 31, 2004 (EUR 195 million in 2003 and 108 million in 2002). Contract revenues recorded
prior to billings, included in receivables, were EUR 80 million at December 31, 2004 (EUR 665
million in 2003 and EUR 573 million in 2002).
Revenue recognition on initial 3G network contracts started in 2002 when Nokia Networks
achieved 3G functionality for its single-mode and dual-mode WCDMA 3G systems. Until the time
3GPP specifications required by our customers were met, the application of the cost-to-cost input
model was deferred. Upon achieving 3G functionality for WCDMA network projects, the Group
began recognizing revenue under the cost-to-cost input method of percentage of completion
accounting and have continued to apply the method in 2003 and in 2004.
5. Personnel expenses
2004 2003 2002
EURm EURm EURm
Wages and salaries ............................................. 2,805 2,501 2,531
Pension expenses, net ........................................... 253 184 224
Other social expenses ............................................ 372 341 385
Personnel expenses as per profit and loss account ..................... 3,430 3,026 3,140
Pension expenses, comprised of multi-employer, insured and defined contribution plans were
EUR 192 million in 2004 (EUR 146 million in 2003 and EUR 167 million in 2002).
2004 2003 2002
EURm EURm EURm
Remuneration of the Chairman and the other members of the Board of
Directors, Group Executive Board and Presidents and Managing Directors* . 25 22 19
* Incentives included in remuneration ............................... 854
Pension commitments for the management:
The retirement age of the management of the Group companies is between 60-65 years.
For the Chief Executive Officer and the President of the Parent Company the retirement age is
60 years. There were also three other Group Executive Board Members whose retirement age is
60 years as of December 31, 2004. There is also one other Member, following his arragement from
a previous employer, who has a retirement benefit of 65% of his pensionable salary beginning at
age 62 with early retirement possible at age 55 with reduction in benefits. Nokia does not offer
any similar benefits to any other members of the 2004 Group Executive Board.
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