Torp Computing Group ASA

56
INFORMATION MEMORANDUM
Merger of Komplett ASA and Torp Computing Group ASA
The consolidated financial statements have been drawn up based on uniform policies. Intra-Group
transactions and accounts, including intra-Group profits and unrealised gains and losses, have been
eliminated. Unrealised gain attached to transactions with associates and jointly controlled activities
have been eliminated proportionate to the Group’s interest in the company/ enterprise. Unrealised
losses have been eliminated correspondingly, but only to the extent there are no indications of a
drop in the value of assets sold within the Group. The Group currently has no subsidiaries
incorporated as a result of acquisitions.
Associates are entities in which the Group exercises considerable influence (usually a stake of 20%
to 50%), but not a controlling financial or operational interest. Associates are recognised using the
equity method of accounting. Komplett owned 35% of Datakjeden AS at 31 December 2006. The
stake remained unchanged in 2006. The consolidated financial statements include the Group’s
share of Datakjeden’s profit after tax. This is presented as financial income. Datakjeden was
acquired when the Group’s chain of Komplett Data shops was sold through an MBO (management
buy out) in 2003. The transaction was conducted with effect for accounting purposes as from 1
January 2003, at which time a new company (Datakjeden AS ) was established. 35% of the gain
on the sale of the investment is treated as deferred income.
Functional currency and reporting currency
The Group’s reporting currency is NOK. This is also the parent company’s functional currency.
Subsidiaries with other functional currencies are translated at the exchange rates prevailing on the
date of balance sheet recognition, and profit and loss items are translated at the exchange rate on
the transaction date. Average monthly rates are used as the rate on the transaction date. Foreign
currency translations are charged against equity.
Foreign currency
Foreign currency transactions are translated at the exchange rates prevailing on the transaction
date. Monetary items in foreign currency are translated to NOK using rates on the date of balance
sheet recognition. Non-monetary items measured at historical rates expressed in foreign currency
are translated to NOK using the exchange rate at the time of the transaction.
Currency fluctuations are booked on an ongoing basis during the accounting period. Assets and
liabilities in foreign undertakings are translated to NOK using the rate on the date of balance sheet
recognition. Income and expenses from foreign undertakings are translated to NOK using average
exchange rates. Foreign currency translations are booked directly against equity. Foreign currency
translations arising from the translation of net investments in foreign undertakings are specified as
foreign currency translations in equity. Foreign currency translations in equity are taken to income
or expensed upon the divestment of the foreign undertaking.
Sales revenues
A sale is recognised when a unit within the Group has sold and delivered a product to a customer.
The sale is measured at the agreed sales price less discounts, if any, value-added tax, etc. Articles
that are to be credited (due to cooling off period or complaint), are credited when the returned
article is received by the selling unit. Sales to private individuals are generally settled by cash on
delivery or credit card. Credit card fees are booked as selling costs. Sales to corporate customers
can also be settled by ordinary factoring if the customer’s credit rating is good. Komplett offers
consumer financing to customers. Revenues from consumer financing activities include instalment
charges, an opening fee and interest. Revenues are classified as operating revenue and income is
accrued using the effective interest method.