Annual Report 2012.pdf - Cherry

Part 2 notes
TANGIBLE FIXED ASSETS
Tangible fixed assets are reported at their
historic acquisition cost after deduction for
accumulated depreciation and any writedowns.
Repairs and maintenance are recognised
on a regular basis. Depreciation is based
on the original acquisition value, reduced by
the estimated residual value and taking into
write-downs made.
Linear depreciation is applied over the useful life
of the assets as follows:
Slot machines in use
3-10 years
Product gaming
2 years
Recreational gaming
2-5 years
Casino tables
5 years
Casino wheels, Sweden
3-5 years
Scanning system (maritime slot machines) 3-5 years
Registering equipment (Swedish casino) 3 years
Other gaming inventories
max 5 years
Office inventories
5 years
Computers
3 years
Vehicles
3-5 years
INVENTORIES
Inventories are valued at the lower of the acquisition
cost after the requisite deduction for obsolescence
and net sales value. The acquisition
value for the inventory is calculated through
the application of the FIFO method.
LEASING
Leasing is classified as either financial or operational
leasing.
Leasing where an essential part of the risks
and advantages of the ownership are retained
by the lessor is classified as operational leasing.
Payments made during the leasing period
(after deductions for any incentives from the
lessor) are recognized in the income statement
linearly over the leasing period.
The group leases some tangible fixed assets.
Leasing agreements of fixed assets where the
group essentially holds the financial risks and
advantages associated with the ownership is
classified as financial leasing. At the start of the
leasing period financial leasing is reported in
the balance sheet at the lower of the fair value
of the leasing object and the current value of
minimum lease charges.
Each leasing payment is allocated between
amortisation of the liability and financial expenses.
The corresponding payment obligations,
after deduction of financial expenses, are
included in the balance sheet items Long-term
borrowing and Short-term borrowing. The interest
part in the financial expenses is reported
in the income statement, allocated over the
leasing period so that each accounting period
is charged with an amount that corresponds to
40 | annual report 2012
a fixed interest rate for liability reported during
respective periods. Fixed assets held in accordance
with financial leasing agreements are
written-down during the shorter period of the
asset’s useful life and leasing period.
The scope of Cherry’s operational leasing
agreements is reported in Note 14 and financial
leasing agreements are indicated in Note 16.
REMUNERATION TO EMPLOYEES
SHORT-TERM REMUNERATION
Short-term remuneration to employees is calculated
with discounting and reported as an
expense when the related services are received.
A provision for estimated bonus payments and
other contractual compensation is reported
when the group has legal or informal obligations
to make such payments as a result of the
fact that the services in question have been received
from the employees and the provision
amount can be estimated reliably.
PENSION COMMITMENTS
Pension plans are financed through payments
from respective group companies and in some
cases from the employees. All pensions are
reported as defined contributions. Group payments
concerning defined contribution pension
plans are recognised during the period
the employees have performed the services to
which the contributions refer. Pensions for employees
who have chosen the opportunity of an
alternative ITP and pensions for croupiers and
dealers are defined contributions.
Pension commitments for some the company’s
employees are secured through insurance
in Alecta. Alecta’s surplus can be distributed to
policy holders and/or the insured. At the end of
2012, Alecta’s surplus amounted in the form of
the collective consolidation level to 130 percent
(preliminary data, the last previous year it was
143 percent). The collective consolidation level
consists of the market value of Alecta’s assets
in percent of the insurance commitments calculated
in accordance with Alecta’s insurance
undertakings, which do not correspond with
IAS 19.
COMPENSATION ON NOTICE OF TERMINATION
Compensation on the termination of employment
is paid when an employee is given notice
by the company prior to the normal pension
date, or when an employee accepts a voluntary
retirement from in exchange for such compensation.
The group reports severance pay
when it is manifestly obliged to give notice to
an employee in accordance with a detailed formal
plan without the opportunity of recall. In
the event the company has issued an offer to
encourage voluntary retirement, the severance
pay is based on the number of employees who
are estimated to accept the offer. Benefits due
more than 12 months after the end of the reporting
period are discounted to current value.
INCENTIVE PROGRAMME
The 2011–2014 incentive programme for the
Cherry group does not come under IFRS 2 and
share related compensation. Employees are offered
options at market prices.
PROVISIONS
A provision is reported in the balance sheet
when the group has an existing legal or informal
obligation as a result of an event that has
occurred, and where it is likely that an outflow
of financial resources will be needed to regulate
the obligation and it is possible to make
a reliable estimation of the amount. A provision
for restructuring is reported when the
group has established a detailed and formal
restructuring plan, and the restructuring has
either been begun or has been officially acknowledged.
Provisions are reported in the balance
sheet under other current and long-term
liabilities. When the outflow of resources is
estimated to take place later than one year after
the balance sheet date, the expected future cash
flow is discounted and the provision is reported
at capitalised value.
CASH FLOW STATEMENT AND
DEFINITION OF LIQUID ASSETS
The cash flow statement is prepared in accordance
with the indirect method. The reported
cash flow only included transactions that permit
incoming or outgoing payments. Liquid
assets are classified as cash and bank balances
with a term shorter than three months, and
which are only exposed to a negligible risk of
fluctuations in value.
PARENT COMPANY
ACCOUNTING PRINCIPLES
The parent company accounting is prepared
in accordance with the Annual Accounts Act
and RFR 2 Accounting regulations for legal
entities. The parent company applies the same
principle as the group, with the exception
of the following. The principles remain unchanged
in comparison with previous years,
unless otherwise stated in Changes in accounting
principles.
Deviations between group and parent company
accounting principles are motivated by
the limitations the Annual Accounts Act imposes
in the application of IFRS in the parent
company and the tax regulations that enable
different accounting for legal entities than for
the group.