Annual Report 2012 - Inwido

FINANCIAL STATEMENTS
instrument is measured after the first recognition as described
below. Derivative instruments are initially recognized at
fair value, which means that any transaction expenses are
charged against the profit/loss for the period. After the initial
recognition, derivative instruments are accounted for as
described below. Hedge accounting is not applied. Value gains
and losses on derivatives are reported as income or expense
in operating profit/loss or in net financial items based on
whether the use of the derivative is related to an operating or
financial item. Cash and cash equivalents comprise cash and
instantly accessible balances at banks and equivalent institutions
as well as current investments with a term from the
acquisition date of less than three months which are exposed
to only a negligible risk of fluctuations.
Financial assets recognized at fair value in profit/loss
This category consists of two sub-groups: financial assets held
for sale and other financial assets that the Group has initially
chosen to place in this category. A financial asset is classified
as being held for sale if it is retained with the intention of
being sold in the near future. Derivatives with positive fair
value are classified as being held for sale. Assets belonging to
this category are continuously recognized at fair value with
changes in value recognized in profit/loss for the year.
Changes in loans and accounts receivable
Loan receivables and accounts receivable are non-derivative
financial assets with fixed or determinable payments that are
not quoted in an active market. These assets are measured at
the amortized cost. The amortized cost is determined based
on the effective interest calculated at the time of acquisition.
Accounts receivable are recognized at the amount estimated
to be paid, i.e. with a deduction for doubtful receivables.
Unlisted shares and participations
The company’s holdings of unlisted shares and participations
are valued at cost in accordance with the exemption
rule in IAS 39 for equity instruments for which fair value
cannot be reliably determined. These are classified as financial
assets available for sale.
Financial liabilities recognized at fair value in profit/loss
This category consists of two sub-groups: financial liabilities
held for sale and other financial liabilities that the Group
has initially chosen to place in this category. Derivatives
with negative fair value are classified as being held for sale,
with the exception of derivatives that are identified and effective
hedging instruments. Fair value changes are recognized
in profit/loss for the year.
Other financial liabilities
Loans and other financial liabilities, such as accounts
payable, are included in this category. The liabilities are
measured at the amortized cost.
Derivatives and hedge accounting
The Group’s derivative instruments have been acquired to
financially hedge its interest and exchange rate exposures.
Currency forward contracts are used to hedge forecast sales
and purchasing in foreign currencies. To hedge the uncertainty
in highly probably forecast interest flows in borrowing
at variable rates, interest rate swaps are used whereby the
company receives variable interest but pays fixed interest.
Derivatives are initially recognized at fair value, which means
that any transaction expenses are charged against profit/loss
for the period. The Group has elected not to apply hedge
accounting, meaning that on-going changes in the fair value
of the derivatives are reported in profit/loss for the year.
Tangible fixed assets
Owned assets
Tangible fixed assets are stated in the Group at cost less
accumulated depreciation and any impairment. The cost
includes the purchase price and costs directly attributable to
bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended.
Borrowing expenses directly attributable to the purchase,
construction or production of assets that take considerable
time to complete for the intended use or for sale are included
in cost. Accounting principles for impairment of assets
are shown below. The cost for self-constructed fixed assets
includes expenses for materials, employee benefits, other
manufacturing costs considered directly attributable to the
fixed asset where applicable, as well as estimated expenses
for dismantling and removing the asset and restoring the
site or area where it is located. Tangible fixed assets comprising
parts with different useful lives are treated as separate
components of tangible fixed assets. The carrying amount
for a tangible fixed asset is derecognized from the statement
of financial position on scrapping or sale, or when no future
economic benefits are expected from the use, scrapping
or sale of the asset. Gains or losses arising from the sale or
scrapping of an asset constitute the difference between the
sale price and the asset’s carrying amount less direct sales
expenses. Gains and losses are recognized as other operating
income/expense.
Leased assets
Leases are classified in the consolidated accounts as either
financial or operating leases. A financial lease is a lease
whereby the financial risks and rewards associated with
the ownership are in all essentials transferred to the lessee.
If this is not the case the lease is considered an operating
lease. Assets leased through financial leasing agreements are
reported as assets in the statement of financial position and
initially valued at the lower of the fair value of the leased
item of the current value of the minimum leasing fees at
the commencement of the agreement. Obligations to pay
future lease payments have been recognized as long-term
and current liabilities. The leased assets are depreciated
according to plan while the lease payments are recognized
as interest and reduction of the liabilities. For operating
leases, the lease payment is expensed over the lease term
in accordance with the usage, which may differ from what
is de facto paid in leasing fees during the year.
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Inwido AB | Annual Report 2012