Annual Report 2010 - CDON Group

CDON Group AB
Annual Årsredovisning report 2010 2010
2.10 Financial instruments
Financial instruments recognised on the statement of financial position include cash and cash equivalents, loan receivables, and
accounts receivable among the assets and accounts payable and loans payable among the liabilities.
2.10.1 Recognition on and derecognition from the statement of financial position
A financial asset or financial liability is recognised on the statement of financial position when the company becomes a party to the
contractual provisions of the instrument. Accounts receivable are entered on the statement of financial position when an invoice is
sent. Liabilities are entered when the counterparty has rendered a service or supplied a product and there is a contractual
obligation to pay, even if an invoice has not yet been received. Accounts payable are recognised when an invoice is received.
Financial assets are removed from the statement of financial position when the entitlements of agreements are realised, fall due, or
the Company loses control of them. The same applies to part of a financial asset. Financial liabilities are removed from the
statement of financial position when contractual obligations are fulfilled or are otherwise extinguished. The same applies to part of
a financial liability.
Financial assets and financial liabilities are offset and recognised at the net amount on the statement of financial position only when
there is a legal offset right for the amounts and the intention is to (1) settle the items at a net amount, or (2) realise the asset and
settle the liability simultaneously.
Acquisitions and disposals of financial assets are recognised on the settlement date, which is the date the asset is delivered to or
from the Company.
2.10.2. Classification and measurement
Financial instruments that are not derivatives are initially recognised at cost corresponding to the fair value of the instrument, plus
transaction costs for all financial instruments apart from those in the category of financial assets at fair value through profit or loss;
these are recognised at fair value excluding transaction costs. A financial instrument is presented at initial recognition based in part
on the purpose for which it is acquired. The classification determines how the financial instrument is valued after initial recognition,
as described below.
Cash and cash equivalents consist of cash.
2.10.3 Loans receivable and accounts receivable
Loans receivable and accounts receivable are non-derivative financial assets that have fixed or determinable payments and are not
quoted on an active market. These assets are valued at amortised cost, which is determined on the basis of the effective rate as
calculated at the time of acquisition. Accounts receivables are recognised at the amounts expected to be received, that is, less bad
debts.
2.10.4 Other financial liabilities
This category contains loans and other financial liabilities, such as accounts payable. Liabilities are valued at amortised cost.
Consolidated financial assets and liabilities are allocated to the categories described in Note 20 Financial Instruments and Risk
Management. Recognition of financial income and expenses is also described in item 2.8 above.
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