I.A. Hedin Bil - Annual Report 2018 1
NOTES Amounts in thousand SEK (kSEK) unless state
d otherwise. NOTE 1 MATERIAL FINANCIAL REPORTING STANDARDS The Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU. RFR 1 Complementary Accounting Regulations for Groups, issued by the Swedish Financial Reporting Board, has also been applied. Assets and liabilities have been valued at cost with the exception of certain disposable financial assets, as well as financial assets and liabilities valued at fair value through profit or loss account. The Board approved these Consolidated Financial Statements for publication on March 26, 2019. Preparing financial statements in accordance with IFRS requires the use of a number of significant estimates for accounting purposes. Furthermore, the management is required to make certain assessments when applying consolidated reporting standards. The areas that involve a high degree of assessment, which are complex, or are areas in which assumptions and estimates are of material significance to the Consolidated Financial Statements, are described in Note 3. New financial reporting standards 2018 At the time of publication of this Annual Report, a number of standards and interpretations have been published which have not yet come into force. There are no plans to apply new standards and amendments in advance. There was no significant impact on the Group's accounts resulting from new or amended IFRS standards in 2018. IFRS 9 Financial instruments deals with classification, valuation and reporting of financial liabilities and assets and replaces the current sections in IAS 39. IFRS 9 states that financial assets must be divided into two classifications: measured at fair value or at cost. The classification is adopted on initial recognition based on the company’s business model and characteristic features in the contractual cash flows. It also includes a forward-looking impairment model of expected customer bad debts. IFRS 9 came into force on 1 January 2018. The evaluation of the effect on the Group has taken place and the introduction has not had any significant effect on the Group. IFRS 15 Revenue from Contracts with Customers regulates the reporting of revenues. The principles on which IFRS 15 is based will provide users of financial statements with more useful information regarding the company’s earnings. The expanded reporting obligation means that information must be provided on the type of revenue, the time of settlement, uncertainties linked to revenue recognition and cash flow attributable to the company’s customer contracts. According to IFRS 15, revenue is recognized when the customer receives control of the sold product or service and has the opportunity to use and receive benefit from the product or service. IFRS 15 replaces IAS 18 Revenue and IAS 11 Entrepreneurship agreements and associated SIC and IFRIC. IFRS 15 came into force on January 1, 2018. The evaluation of the effect on the Group has taken place and the introduction has not had any significant effect on the Group. New financial reporting standards 2019 IFRS 16 Leases is a new leasing standard that will replace IAS 17 Leases and the associated interpretations IFRIC 4, SIC-15 and SIC-27. The standard requires that assets and liabilities attributable to all leases, with a few exceptions, are reported in the balance sheet, regardless of whether they are operating or financial leases. This accounting is based on the view that the lessee has the right to use an asset for a specific period of time and at the same time has an obligation to pay for this right. All leases with a maturity of more than 12 months shall be reported in the balance sheet and leasing fees are recognized in the income statement with depreciation separately from the interest expense. The leasing debt corresponds with the discounted present value of future lease payments. The principles will be applied from January 1, 2019 and the financial year 2018 will not be recalculated. The simplified approach that the right of use (before adjustments for any advance payments) shall correspond to the leasing debt and the simplified approach for the definition of a leasing agreement has been applied at the transition, which meant that all components of a lease agreement were considered a leasing component. The exceptions for not reporting short-term leases and assets of low value are also applied. The accounting for the lessor will in all essentials remain unchanged. The standard applies for financial years beginning January 1, 2019 or later. The largest asset class in the leasing agreement relates to properties, which refers to the facilities where Hedin Bil conducts its business. The effect on the opening balance is estimated to MSEK 4,500. Other new or amended reporting standards are not deemed to have a significant impact on the Group's financial reports. Consolidated Financial Statements The Consolidated Financial Statements have been prepared in accordance with the principles set out in IFRS 10, Consolidated Financial Statements. The financial statements cover the Parent Company, I.A. Hedin Bil AB, and all companies in which the Parent Company, directly or indirectly, holds more than 50 percent of the voting rights, or otherwise has a controlling interest. The Group has controlling interests in a company when it is exposed to, or has the right to, variable returns on shares in the company, and can affect returns by way of its controlling interests in the company. Companies are included in the Consolidated Financial Statements on the date controlling interests are transferred to the Group. They are excluded from the consolidated financial statement on the date controlling interests expire. Intragroup transactions, balance sheet items and unrealized gains and losses deriving from intragroup transactions are eliminated. Acquisition method The acquisition method is used for reporting the Group’s business acquisitions. The purchase price for the acquisition of a subsidiary comprises the fair value of assets and liabilities. The purchase price also includes all assets and liabilities at fair value as a result of an agreed contingent purchase sum. Subsequent fair value adjustments of a contingent purchase sum that is classified as an asset or liability are reported in accordance with IAS 39, either in the Income Statement or in Other Comprehensive Income. Contingent purchase sums that are classified as equity are not revalued and the subsequent adjustment is reported under Equity. If the purchase price exceeds the fair value of identifiable acquired net assets, the difference is reported as goodwill. If, in the case of an acquisition made at a low purchase price, and the amount is below the fair value of the acquired net assets, the difference is reported through the income statement. Costs relating to acquisitions are expensed as they arise. I.A. HEDIN BIL AB / ANNUAL REPORT / 2018 59