LFV Annual Report 2019 1
L F V 2019 A CC OUNTING AND V AL U ATION PRINCIPL
E S ACCOUNTING AND VALUATION PRINCIPLES ACCOUNTING PRINCIPLES LFV's accounts for the state-owned enterprise and the group comply with Ordinance (2000:605) on Annual Reports and Budget Documentation (FÅB), the Swedish National Financial Management Authority’s (ESV) regulations and general advice and the requirement for generally accepted accounting practices as per the Bookkeeping Ordinance (2000:606). To the extent that there is no standard directly aimed at authorities and government agencies, LFV applies (as reported in each sector below) the valuation rules set out in the Swedish Accounting Standards Board's General Guidelines BFNAR 2012:1 Annual Report and Consolidated Accounts (K3). LFV's subsidiaries draw up annual reports in accordance with the Swedish Annual Accounts Act and BFNAR 2012:1 Annual Report and Consolidated Accounts (K3). The accounting principles are unchanged in comparison with the previous year. FORMAT AND SUPPLEMENTARY INFORMATION Income statements, blance sheets and funds statements have been formatted in accordance with the rules applying to state-owned enterprises and state-owned enterprise groups. CONSOLIDATED ACCOUNTS LFV draws up consolidated accounts. The consolidated accounts include the state-owned enterprise and the group companies in which the state-owned enterprise directly or indirectly holds more than half of the votes for all of the shares or otherwise exercises a controlling influence (subsidiaries) as well as the other companies (associated companies) in which the state-owned enterprise has significant influence as a result of shareholdings. Outstanding accounts between group companies are eliminated in their entirety. The principles used for the group’s reporting of deferred tax are described below under the heading Taxes and Tax Equivalent. 52 Subsidiaries The companies in which LFV directly or indirectly holds more than half of the votes for all of the shares or otherwise exercises a controlling influence are classified as subsidiaries and are brought together un the consolidated accounts. The group's annual accounts are drawn up in accordance with the acquisition method. The acquisition date is the date on which the controlling influence was obtained. Subsidiaries in other countries draw up their annual reports in foreign currencies. At the time of consolidation, the items in these subsidiaries’ balance sheets and profit and loss accounts are recalculated using the closing rate of exchange on the spot rate for the day each business transaction took place. The exchange rate differences that arise are accounted for in accumulated exchange rate differences in the group's equity. Associated companies Companies in which the state-owned enterprise or LFV Holding AB can exercise significant influence as a result of holding between 20 and 50 percent of the votes are accounted for as associated companies. Associated companies are accounted for accordance with the equity method in the consolidated accounts. REPORTS FROM AREAS OF OPERATION AND GEOGRAPHICAL MARKETS LFV's operations consists of four main lines of business: air navigation services, research and innovation, other commercial services and operations directly funded by the state. More than 90 per cent of operations are conducted in Sweden. A lesser part, mainly of other commercial services, originates from markets outside of Sweden, principally Norway and Denmark. REVENUE RECOGNITION Revenues are recognised the extent it is probable that the economic benefits will fall to the group and that these benefits can be calculated reliably. In the consolidated accounts, intra-group turnover is eliminated. The principles applied are essentially consistent with BFNAR 2012:1 (K3), chapter 23 Revenue, which the subsidiaries apply for revenue recognition. Revenues are recognised at the real value of what has been or will be received, with deductions for discounts received. Appropriations are recognised and deducted in according to the Appropriations Ordinance (2011:223). Under the Balance with Central Government heading, income and expenses are recognised against the revenue heading and allocations, along with payments to and from the government’s central account. Recognition of allocations should be divided between allocations in interest-bearing and non-interest-bearing flow. As regards investments within the scope of the appropriation funded operations, offsetting against the appropriation takes place in step with deductions for the coming years. Grants are recognised as revenue upon receipt if the purpose of the grant is for it to be used at LFV and is non-repayable, or if the probability of repayment is low. Grants that may need to be repaid are also recognised as revenue if such obligatoin arises only in cass where the state-owned enterprise does not observe conditions and regulations for the grant in question, or if something unexpected occurs that affects the terms of the grant. Advances received from EU grants are deducted for the final accounts for a given project rather than currently. Unused grants are accrued for covering future costs and are recognised under the item for Other short-term liabilities. Interest and dividends are recognised as revenue when it is probable that the group will be receiving the financial benefits associated with the transaction and that the revenue can be reliably calculated. Valuation of ongoing assignments For assignments wih a fixed price, the income and expenditure attributable to