CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

of occupational pension insurance, liabilities entered into an account allocated for pensions (FPG/PRI) or payment to apension foundation (the KP Foundation) in accordance with the provisions of the Swedish Pension Security Act. Thedefined benefit pension plans are both funded and unfunded. If the plans are funded, assets have been separated in thepension foundation (KP Foundation). These plan assets can only be used to make payments in accordance with thepension agreement. The plan assets are valued at the fair value as of the reporting date.The liability recorded in the balance sheet in respect of defined benefit pension plans is the current value of thedefined benefit obligation on the balance sheet date minus the fair value of the plan assets, with adjustments forunrecorded actuarial gains and losses and for unrecorded expenses for service during earlier periods. The defined benefitpension obligation is calculated on an annual basis by independent actuaries applying the projected unit credit method.The current value of the defined benefit obligation is defined by discounting the estimated future cash flows using theinterest rate for first class government bonds issued in the same currency in which the benefits will be paid and withterms comparable to those of the relevant pension liability.Actuarial gains and losses resulting from experience-based adjustments and changes in actuarial assumptions inexcess of 10% of the value of the plan assets and 10% of the defined benefit obligation are recognized as expenses orincome over the estimated average remaining period of service of the employees.Expenses in respect of service during earlier periods are recorded directly in the profit (loss) for the year, unlessthe changes in the pension plan are conditional upon the employees’ remaining in service for a specified period (thequalification period). In such cases the expense is allocated in respect of service during earlier periods on a straight-linebasis over the qualification period.For defined contribution pension plans, the Group pays contributions into publicly or privately managed pensioninsurance plans on a mandatory, contractual or voluntary basis. The Group has no additional payment obligations oncethe contributions have been paid. The Group’s profit (loss) is charged with expenses as the benefits are earned. Prepaidcontributions are recorded as an asset to the extent that cash repayment or a reduction in future payments may benefit theGroup.Benefits upon notice of terminationBenefits upon notice of termination are paid when notice is served by the Group to terminate an employee’semployment before normal retirement age or when an employee accepts voluntary termination in exchange for suchcompensation. The Group records severance payments when it has been clearly obliged either to lay off an employeeaccording to a detailed, formal plan without any possibility of recall, or to pay compensation when serving notice as aresult of an offer having been made to encourage voluntary termination.Profit-sharing plansThe Group records a liability and an expense for profit shares based on the return on working capital. The Grouprecords a provision when there is a legal obligation or an informal obligation based on previous practice.Recording incomeIncome comprises the fair value of what has been received or will be received. Income is recorded excludingVAT, returns and discounts, and after the elimination of internal Group sales.The Group records an item of income when its amount including attributable expenses can be measured in areliable way and it is probable that future financial benefits will accrue to the Company. It is not considered that theincome amount can be measured reliably until all obligations in respect of the sale have been fulfilled or expired. TheGroup bases its assessments on historical results and in doing so takes account of the type of customer, type oftransaction and special circumstances in each individual case.Sale of goodsThe Group’s main income originates from the sale of goods in the form of petroleum products. Products are soldto oil companies operating in Sweden and on the international market, primarily in North-western Europe. Sales ofgasoline, diesel, heating oils and lubricating oils in the Swedish market to private customers, large and small companies,are conducted via our own marketing channels, Preem Partners and gas stations.Income from sale of goods is recorded when the Group has transferred the significant risks and benefitsassociated with ownership of the goods to the buyer, which takes place in connection with delivery. Once the income forthe sale of a product has been recorded, the Group no longer has any involvement in the ongoing administration usuallyassociated with ownership, nor does it exercise any actual control over the products sold.F-13