LFV Annual report 2018 1
A CC OUNTING AND V AL U A TION PRIN CIPLE S L F V
2018 The gross rate is calculated by Finansinspektionen as an average of the interest rates for long-term inflation-linked bonds for the period of October 1 to September 30 for the previous year. The year’s provisions for pension liability have been written off together with the bonuses paid. The interest portion of the year’s pension costs is accounted for under financial revenue and costs. The interest portion includes indexation of pension benefits and changes to the calculation principles as a result of changed interest rate assumptions. The pension liability includes commitments regarding both active staff and pensioners. Conditional commitments with respect to staff who have a retirement age of less than 65 years are included in the liability at 100 percent, since these pension provisions are expected to become fully utilised. The state-owned enterprise pays a special payroll tax on pension payments. Provisions for special payroll tax have therefore been accounted for as pension liabilities at the end of the financial year. LFV’s pension obligations as stated above are accounted for under Provisions. CONTINGENT LIABILITIES Obligations arising from past events that are not recognised as liabilities or provisions because the size of the obligation cannot be calculated with sufficient reliability, or it is unlikely that an out - flow of resources will be required to settle the obligation, are recognised as contingent liabilities. Also recognised as contingent liabilities are potential obligations arising from past events, the existence of which are confirmed only by the occurrence or non-occurrence of one or more uncertain future events that are not entirely within the group’s control. TAXES, TAX EQUIVALENTS AND DIVIDENDS LFV’s subsidiaries account for current tax and thus pay income tax. The corporation tax rate in Sweden is 22 percent. For the 2019–2020 financial year, the tax rate has been reduced to 21.4 percent, and to 20.6 percent from 2021. The State-owned enterprise LFV is not liable for income tax, but LFV applies Chapter 10 in ESV’s Special provisions for State-owned enterprises and complies with the government’s regulations concerning what is known as tax equivalent, which means that State-owned enterprises are to provide an amount to the central government equivalent to the income tax that would have been payable had the organisation been a limited company. The current tax equivalent for the year is calculated based on the result declared in the consolidated accounts with deductions for fiscal allocations equivalent to the balance sheet allocations a limited company can utilise, with supplements for non-deductible items and non-taxable revenue. Deductions are also made for the income tax paid by subsidiaries. The state-owned enterprise accounts for liabilities regarding the calculated tax equivalent for the financial year. The final amount of tax equivalent to be paid for the year will be confirmed by the government in conjunction with the adoption of LFV’s annual report for 2018. Both the state-owned enterprise and the group declare deferred tax on differences between values accounted for and values for tax purposes and temporary differences, as well as deferred tax as a result of intended allocations calculated on the annual income. The deferred tax of the year is attributable to calculated tax losses and temporary differences relating to valuation of claims. Deferred tax liability/claims were calculated or adjusted in the annual accounts as of 31 December 2018, taking into account the new tax rate for the coming years. The equity part of the subsidiaries untaxed reserves and the utilised part of the state-owned enterprise’s possibility to accelerate the depreciation of facilities is included in the restricted reserves recognised in the state-owned enter55 prise's accounts and in the consolidated accounts. LFV pays special payroll tax on pension costs and is liable in accordance with the Value Added Tax Act. Since 2009, LFV has not been entitled to deduct VAT when exercising its official authority, which refers to LFV’s making air navigation charges. LFV does, however, receive compensation for input VAT as per the regulation on authorities’ right to receive compensation for input VAT (LFV receives compensation for input VAT as per the Ordinance (2002:831) concerning Authorities’ Rights to Compensation for Input VAT). LFV is to distribute dividends for the year 2018 at equivalent for 15 percent of the result after tax. The final amount of the dividend will be established by the government in connection with the adoption of LFV’s annual report for 2018. OTHER The accrual limit of accrued operating revenue and operating expenses in the annual accounts for 2018 and 2017 is 30,000 SEK. With regard to rounding amounts stated in the annual report, the figures shown have in some cases been rounded, which means that tables, graphs and calculations do not always tally. In texts and tables, figures between 0 and 0.5 are shown as 0. A dash indicates that no value is available.