Annual Report 2012 - Inwido

FINANCIAL STATEMENTS
liabilities. Fair value is initially calculated at the time of
allocation and is distributed across the vesting period. The
fair value of the stock options settled in cash is calculated
according to the Black-Scholes model, taking into account
the terms and conditions of the allocated instrument. The
liability is reassessed on each balance sheet date and upon
settlement. All changes in the fair value of the liability are
reported under profit/loss for the year as a financial expense.
Provisions
A provision is recognized in the balance sheet when the
Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic resources will be required to settle the obligation
and a reliable estimation of the amount can be made. When
the effect of the timing of the payment is important, provisions
are calculated by discounting the expected future cash
flow at a pre-tax interest rate which reflects current market
assessments of the time value of money and, if applicable,
the risks associated with the liability.
Guarantees
A provision is made for guarantees when the underlying
products or services are sold. The provision is based on
historical data regarding guarantees and a total appraisal
of conceivable outcomes in relation to the probabilities
with which those outcomes are associated.
Restructuring
Restructuring provisions are recognized when the Group
has adopted a detailed formal restructuring plan and the
restructuring has been commenced or publicly announced.
No provisions are made for future operating costs.
Group contributions
Inwido AB is a subsidiary of listed company Ratos. Group
contributions to and from the Parent Company and sister
companies within the Ratos Group are reported in the
Group as a transaction with the company’s owners directly
in the statement of changes in shareholders’ equity in
accordance with IAS 1, which requires all transactions with
the owners, in their capacity as owners, to be recognized
directly against shareholders’ equity. This means that Group
contributions made with the aim of minimizing the Group’s
total tax are recognized directly against profit brought
forward after deductions for their current tax effect.
The parent company’s accounting principles
The Parent Company has prepared its Annual Report in
accordance with the Swedish Annual Accounts Act
(1995:1554) and Recommendation RFR 2 of the Swedish
Financial Accounting Standards Council, on Accounting for
Legal Entities. Statements issued by the Swedish Financial
Reporting Board are also applied. RFR 2 means that the
Parent Company in the annual report for the legal entity
shall apply all EU-approved IFRS standards and statements as
far as possible within the framework of the Annual Accounts
Act, taking into consideration the relationship between
accounting and taxation. The recommendation stipulates
which exceptions and additions to IFRS shall be applied.
Differences between the group’s and parent
company’s accounting principles
The differences between the Group’s and Parent Company’s
accounting principles are shown below. The accounting
principles shown below for the Parent Company have been
applied consistently to all periods presented in the Parent
Company’s financial statements. Effective from 2012, Group
contributions received and paid are recognized as appropriations
in the income statement. The comparison figures for
2011 have been adjusted according to the new principles.
Previously, Group contributions were reported in accordance
with statement UFR 2 from the Swedish Financial Reporting
Board regarding shareholders’ contributions directly against
shareholders’ equity
Classifications and presentation
The income statement and statement of comprehensive
income are produced separately for the Parent Company,
whereas for the Group these two reports are combined into
a single statement of comprehensive income. In addition
the titles ‘balance sheet’ and ‘cash flow statement’ are used
for the Parent Company for statements that for the Group
are titled ‘consolidated statement of financial position’
and ‘consolidated statement of cash flows’ respectively. The
Parent Company income statement and balance sheet have
been prepared in accordance with regulations stipulated
in the Annual Accounts Act, while the statement of comprehensive
income, summary of changes in shareholders’
equity and cash flow statement is based on IAS 1.
Presentation of financial statements and
IAS cash flow statements
The differences compared with the consolidated statements
that are evident in the Parent Company’s income statement
and balance sheet comprise mainly the reporting of financial
income and expenses, fixed assets and shareholders’ equity.
Subsidiaries, associated companies and joint ventures
Investments in subsidiaries, associated companies and joint
ventures are accounted for in the Parent Company in accordance
with the cost method. This means that transaction
expenses are included in the carrying amount for holdings
in subsidiaries, associated companies and joint ventures. In
the consolidated accounts, transaction expenses attributable
to subsidiaries are recognized directly in profit/loss as they
are incurred. Conditional purchase prices are valued based
on the likelihood that the purchase price will be paid. In
the consolidated accounts, conditional purchase prices are
recognized at fair value with changes in value over profit/
loss. Bargain purchases that correspond to expected future
losses and expenses are resolved over the anticipated periods
during which losses and expenses arise. Bargain purchases
that arise due to other reasons are recognized as provisions,
to the extent that they do not exceed the fair value of the
acquired identifiable non-monetary assets. The portion that
Annual Report 2012 | Inwido AB 61