We - KappAhl

and losses for defined benefit pension obligations are credited or charged
to equity in full when they arise. the change in policy was preceded by a
reorganisation of major parts of the pension plans and consequently there
will no longer be any new accrual. the equity and balance sheet items for the
comparative year 2007/2008 have been restated, entailing a total reduction in
the Group’s equity of SEK 11 million.
• IFRIC 13, Customer Loyalty Programmes, is applicable from the first quarter
of the 2008/2009 financial year. ifric 13 has been evaluated and not found
to have any material impact on the Group’s accounting policies for revenue
recognition.
• In order to increase comparability between the defined segments in the Group
an adjustment has been made so that the part of operations that corresponds
to Groupwide functions is disclosed separately. the corresponding adjustment
has been made of operating segments for the comparison year.
in other respects the Group’s accounting policies are unchanged.
New standards, interpretations and amendments published but
not yet effective
a brief list is provided below of the standards, interpretations and amendments
expected to be relevant to Kappahl’s operations together with a preliminary
assessment of their impact. they have not yet been applied by the Group.
• IAS 1 Presentation of financial statements. Amendment concerning presentation
of revenues and expenditure previously recognised directly in equity. this
will be applied from 1 January 2009, which means the 2009/2010 financial
year for Kappahl. the amendment mainly entails changes in formats.
• IFRS 8 Operating segments. The standard enters into force as of 1 January
2009 and is thus applicable to Kappahl as of the 2009/2010 financial year. the
standard covers the division into operating segments, which must be on the
same basis as the company’s internal structure and follow-up when determining
segments for reporting. in view of this the division into operating segments
is currently under review.
other standards and interpretations are not considered to have any material
impact on Kappahl’s accounting.
Classification etc.
the non-current assets and long-term liabilities of the parent company and the
group essentially consist only of the amounts expected to be recovered or paid
after more than twelve months from the balance sheet date. the current assets
and current liabilities of the parent company and the Group essentially consist only
of the amounts expected to be recovered or paid within twelve months from the
balance sheet date.
Consolidation principles
Subsidiaries
Subsidiaries are entities over which Kappahl holding aB (publ) has a controlling
influence. controlling influence means having the direct or indirect right to formulate
a company’s financial and operative strategies for the purpose of making
financial gains. the purchase method is used to account for subsidiaries. the
purchase method means that the acquisition of a subsidiary is regarded as a
transaction by which the Group indirectly acquires the assets of the subsidiary
and assumes its liabilities and contingent liabilities. the consolidated cost of
acquisition is established through an acquisition analysis in connection with the
business combination. this analysis establishes both the cost of acquisition of the
shares or business, and the fair value of the identifiable acquired assets and
assumed liabilities and contingent liabilities. the difference between the cost of
acquisition of the subsidiary’s shares and the fair value of the acquired assets,
assumed liabilities and contingent liabilities is recorded as goodwill.
Where the conditions for accounting for a business combination are not
present, the transaction is accounted for instead as an asset acquisition, applying
ifrS 3, paragraph 4 and iaS 12, paragraph 15.
acquisition of real property during the previous year was not regarded as
constituting a business combination and was therefore accounted for as an asset
acquisition, in which the acquisition price and book value are accounted for in
their entirety as real property divided into building and land.
the subsidiaries’ financial statements are included in the consolidated
accounts from the date of their acquisition to the date on which the controlling
influence ceases.
Foreign currency
Transactions in foreign currency
foreign currency transactions are translated into the functional currency using the
exchange rates prevailing on the date of transaction. monetary assets and liabilities
in foreign currencies are translated to the functional currency using the
exchange rate prevailing on the balance sheet date. translation differences that
arise in connection with translation are recorded in the income statement. translation
differences on non-monetary assets and liabilities, recorded at historical cost,
are translated at the exchange rate on the transaction date. non-monetary assets
and liabilities that are reported at their fair values are translated into the functional
currency using the exchange rates prevailing at the time they are recognised at
their fair value. the translation differences are then reported in the same way as
other changes in the amounts of assets and liabilities.
the functional currency is the currency of the primary economic environment in
which the company operates. the companies in the Group are the parent company
and subsidiaries. the parent company’s functional currency as well as its
reporting currency is Swedish kronor. the Group’s reporting currency is Swedish
kronor. the functional currency of the subsidiaries is the local currency in the
respective country.
Financial statements of foreign operations
assets and liabilities of foreign operations, including goodwill and other consolidated
surpluses and deficits, are translated into Swedish kronor at the exchange
rate in effect on the balance sheet date. the income and expenses of foreign
operations are translated into Swedish kronor at an average rate that is an
approximation of the rates on the respective transaction dates. the translation
differences that arise in connection with translation of foreign operations are
recognised directly in equity as a translation reserve.
Net investment in a foreign operation
translation differences that arise in connection with translation of a foreign net
investment are recorded directly as translation reserves in equity. When a foreign
operation is divested, the accumulated translated differences pertaining to the
operations are realised after deduction of possible hedging in the consolidated
income statement.
Revenue
Sale of goods
revenue from the sale of goods is recognised in the income statement when the
significant risks and rewards associated with ownership of the goods have been
transferred to the buyer. revenue is recognised at the fair value of the consideration
received or receivable, less any discounts given.
all sales are made on a 30-day sale-or-return basis. revenue is recognised on
the date of the sale, subject to sale-or-return.
Operating expenses and financial income and expenses
Payments relating to operating leases
payments relating to operating leases are reported in the income statement on a
straight-line basis over the leasing period. Benefits received in connection with the
signing of an agreement are reported as part of the total leasing expense in the
income statement.
Payments relating to finance leases
minimum lease payments are divided into interest expense and amortisation of
the outstanding liability. interest expense is distributed over the leasing period so
that each accounting period is charged with an amount that is equivalent to a
fixed interest rate for the reported liability during the respective period. Variable
fees are expensed in the periods they arise.
Financial income and expense
financial income and expense consists of interest income on bank balances,
interest expense relating to loans and other financial items.
2008/2009 Kappahl financial information 49