Anders Hedin Invest Årsredovisning 1
Loan costs Loan costs that are directly attributa
ble to acquisition, construction and production of tangible assets that take a significant time to complete, are recognizes as part of the acquisition cost of these assets. Capitalization ceases when the asset has been completed and is ready to be brought into use. Other loan costs are recognized as costs in the period they arise. Current and deferred taxes The tax expense for the period comprises current and deferred taxes. The tax is reported in the income statement, with the exception of taxes reported under Other comprehensive income or directly in equity. In those cases, the tax is also reported under Other comprehensive income and Equity. The current tax cost is calculated based on the set tax rules or that were decided in the countries where the parent company and its subsidiaries are active and generate taxable income. The deferred tax is recognized on all temporary differences arising between the taxable value of assets and liabilities and their carrying value in the Consolidated Financial Statements. However, the deferred tax liability is not recognized if it arises as a result of the initial recognition of goodwill. Moreover, the deferred tax is not recognized if it arises as a result of a transaction that represents the initial recognition of an asset or liability that is not a business acquisition and that, at the time of the transaction, does not affect the reported or taxable income. Deferred taxes are calculated using tax rates that have come into force or have been published at the year-end and which are expected to be in force when the relevant deferred tax asset is realized or the deferred tax liability is settled. The deferred tax assets are reported provided the future taxable surpluses will be available and against which temporary changes can be utilized. Remuneration to employees Plans for post-employment benefits are classified as either defined contribution plans or defined benefit plans. In defined contribution plans, fixed fees are paid to another company, usually an insurance company, and there is no further obligation to the employee once the fee is paid. The extent of the employee’s post-employment benefits depends on the contributions paid and the return on capital that the fees give. Obligations under defined benefit plans are met partly through the PRI system and partly through an insurance policy with Alecta. Defined benefit pension plans via insurance taken out with Alecta are reported as defined contribution pension plans. All pension premiums are thus expensed during the period they were earned. The liability reported in the Balance Sheet that is attributable to defined benefit pension plans is based on the current value of the defined benefit plan obligation at the year-end. The defined benefit pension plan obligation is calculated annually by independent actuaries using the “projected unit credit method”. The current value of the defined benefit plan is established by means of discounting of estimated future cash flows using interest rates for first-class mortgage bonds that have been issued in the same currency in which payments will be made and in accordance with maturities that are relevant to the pension plan obligation. Revaluation gains and losses that arise as a result of experience-based adjustments and changes in actuarial estimates are accounted for under Other comprehensive income for the period in which they arise. They are included under Retained earnings under Changes in equity and in the Balance Sheet. Costs attributable to services performed for previous periods are reported in the Income Statement. Provisions Provisions are reported in the Balance Sheet in the event the Group has a legal or informal commitment that has resulted from previous events, and when there is a likelihood that an outflow of resources may be required to settle the commitment, and the amount can be forecast with a degree of reliability. No provisions are made for future operating losses. Revenue recognition Revenue is valued at the fair value of the realized amount or the amount that will be realized for goods and services sold following a deduction for discounts, returns and VAT. The Group recognizes revenue when the amount can be measured reliably, which entails a likelihood that future financial benefits will pass to the company, and special criteria have been met for each of the Group’s business operations. The Group bases its estimates on historical results, taking into account the type of customer, transaction and unique circumstances in each case. In cases where the sale of goods is combined with a repurchase agreement, i.e. a future repurchase commitment at a guaranteed residual value, the transaction is reported as an operating lease. The revenue is distributed on a straight-line basis from the sales date to the repurchase date. The asset is reported as a fixed asset, and its disposal is reported under Other liabilities. Commission on transferred financial assets is reported continuously during the term of the contract. For performed service assignments and construction assignments in the construction industry, the income and expenses attributable to the assignment are reported as revenue and cost in relation to the completion of the assignment (percentage of completion). The level of completion of an assignment is determined by comparing the bookkeeping expenses on the balance sheet date with the estimated total expenses. If a service assignment or contractual assignment cannot be reliably calculated, the revenue is reported only if it corresponds to the expenses incurred, that are likely to be replaced by the client. The anticipated loss on an assignment is reported as an expense. Leasing Leasing in which a material proportion of the risks and benefits of ownership are retained by the lessor are classified as operational leases. Payments made for the leasing period are expensed on a straight-line basis in the Income Statement during the term of the lease. In financial leasing, the financial risks and benefits attributable to ownership are transferred to the lessee. Assets that are leased under financial leases are reported as fixed assets and are depreciated during the term of the lease. The obligation to pay future lease charges is reported as a non-current and current liability. Lease charges are reported as interest and repayment of the liability. Cash Flow Statement The Cash Flow Statement is prepared in accordance with the indirect method. The reported cash flow only includes transactions that involve payments received or made. In addition to cash in hand, the company classifies cash and cash equivalents as balances available at banks and other credit institutions, as well as current liquid investments listed on a marketplace and with a maturity of less than three months from the acquisition date. Blocked funds are not classified as cash and cash equivalents. Changes in blocked funds are reported under Investment. Parent Company financial reporting standards The Parent Company applies RFR 2 Accounting for legal entities as well as the Annual Accounts Act. The Parent Company applies different accounting principles compared to the Group in the cases listed below. The Income Statement and Balance Sheet comply with the statement format set out in the Annual Accounts Act. The statement of changes in equity complies with the Group’s statement format but must include the columns listed in the Annual Accounts Act. In addition, this entails 84 ANDERS HEDIN INVEST AB / ANNUAL REPORT / 2017