Nokia 2007 Annual Report Download - page 170

3. Percentage of completion
Contract sales recognized under percentage of completion accounting were EUR 10 171 million in
2007 (EUR 6 308 million in 2006 and EUR 5 520 million in 2005).
Advances received related to construction contracts, included under accrued expenses, were
EUR 303 million at December 31, 2007 (EUR 220 million in 2006). Contract revenues recorded prior to
billings, included in accounts receivable, were EUR 1 587 million at December 31, 2007 (EUR 371 million
in 2006). Billing in excess of costs incurred, included in contract revenues recorded prior to billings,
were EUR 482 million at December 31, 2007.
The aggregate amount of costs incurred and recognized profits (net of recognized losses) under
construction contracts in progress since inception (for contracts acquired inception refers to April 1,
2007) was EUR 10 173 million at December 31, 2007 (EUR 6 705 million at December 31, 2006).
Retentions related to construction contracts, included in accounts receivable, were EUR 166 million at
December 31, 2007 (EUR 131 million at December 31, 2006).
4. Personnel expenses
2007 2006 2005
EURm EURm EURm
Wages and salaries ........................................... 4 664 3 457 3 127
Sharebased compensation expense, total ......................... 236 192 104
Pension expenses, net ........................................ 420 310 252
Other social expenses ......................................... 618 439 394
Personnel expenses as per profit and loss account .................. 5 938 4 398 3 877
Sharebased compensation expense includes pension and other social costs of EUR 8 million
(EUR 4 million in 2006 and EUR 9 million in 2005) based upon the related employee benefit charge
recognized during the year. In 2006, a benefit was recognised due to a change in the treatment of
pension and other social costs.
Pension expenses, comprised of multiemployer, insured and defined contribution plans were
EUR 289 million in 2007 (EUR 198 million in 2006 and EUR 206 million in 2005).
2007 2006 2005
Average personnel
Mobile Phones ............................................. 3 475 3 639 2 647
Multimedia ............................................... 3 708 3 058 2 750
Enterprise Solutions ........................................ 2 095 2 264 2 185
Nokia Siemens Networks .................................... 50 336 20 277 17 676
Common Group Functions .................................... 40 920 36 086 31 638
Nokia Group .............................................. 100 534 65 324 56 896
5. Pensions
The Group’s most significant pension plans are in Finland and Germany. The Finnish plan is comprised
of the Finnish state Employees’ Pension Act (“TyEL”) system with benefits directly linked to employee
earnings. These benefits are financed in two distinct portions. Majority of the benefits are financed by
contributions to a central pool with the majority of the contributions being used to pay current
benefits. The rest is comprised of reserved benefits which are prefunded through a trustee
administered Nokia Pension Foundation. The pooled portion of the TyEL system is accounted for as a
defined contribution plan and the reserved portion as a defined benefit plan. Foreign plans include
both defined contribution and defined benefit plans.
F27
Notes to the Consolidated Financial Statements (Continued)