Torp Computing Group ASA

Torp Computing Group ASA
Accounting principles
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally
accepted accounting principles in Norway. The company is listed on the OTC A-list.
Consolidations principles
Classification and valuation of balance sheet items
Translated into English for information purposes only
Notes to the accounts for 2006
The group includes the Parent company Torp Computing Group ASA and the subsidiaries Itegra AS, MPX.no AS (previous Web
Distribusjon AS), Micro Parts Express Sweden AB, TCG Kapital AS and Torp Distribusjon AS. The consolidated accounts are prepared as
if the Group was one entity. Transactions and intercompany balances in the group are eliminated. The consolidated accounts is performed
using uniform principles, this means that subsidiaries are using the same accounting principles as the parent company.
Purchased subsidiaries are booked in the group account based on the parent company acquisition costs. The acquisition cost is allocated
on the identifiable assets and liabilities in the subsidiary. The assets and liabilities are booked as fair value on the time of the acquisition.
Potential excess value or less value compared with identifiable assets and liabilities will be booked as goodwill. Excess value will be
depreciated linearly according to the expected lifetime of the purchased assets.
Subsidiaries
Subsidiaries are valued using the acquisitions methods in the parent company. The investment is valued as cost of acquiring shares,
providing they are not impaired. It has been performed write-down’s to fair value when the impairment is considered not to be temporary an
considered necessary in accordance with generally accepted accounting principles. Write-down will be reversed when the impairment no
longer is present.
Dividend and other distributions (group contribution) are recognized revenue the same year it is purposed in the subsidiary. If the dividend
exceeds the part of the detained results after the acquisition, the exceed part represent repayment on invested capital, and exceeding
dividend will be redrawn from the investment in the balance.
Revenue recognition
Revenue from sales of goods is recognised at the time of delivery. The share of sales revenue associated with future service is recorded in
the balance sheet as deferred sales revenue, and is recognized as revenue at the time of execution.
Receivables are classified as current assets if they are expected to be realised within twelve months after the transaction date. Similar
criteria apply to liabilities. This also includes inventory. All other assets and liabilities are classified as fixed assets and long-term liabilities.
Current assets are valued at the lower of cost and fair value. Short term liabilities are reflected at nominal value.
Fixed assets are carried at historical cost, but will be written down if recovered amount is lower than booked value. Recovered amount is
the highest amount of net sales value and value in use. Long term liabilities are booked to the nominal value at the time of the engagement.
Fixed assets
Fixed assets are recognised in the balance sheet and depreciated over the estimated useful economic life.
Maintenance costs are expensed as incurred as other operating expenses, whereas improvements and additions are added to the acquisitio
cost and depreciated with the asset.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. Finished
goods and work in progress are valued at full absorption cost. Impairments charges are made if fair value less cost to sell is lower than the
cost price.
Trade and other receivables
Trade and other receivables are recognised in the balance sheet at nominal value after deduction of provision for bad debts. The provision
for bad debts is estimated on the basis of an individual assessment of each major receivable. In addition, for the remainder of the
receivables, a general provision is made based on estimated expected losses.
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