The LFV Group - Airport Mediation - Home

AccountsThe Government’s instructions to LFV(SFS 1988:78) specify that LFV and thecompanies in which the Swedish State,through LFV, directly or indirectly has acontrolling influence together form a Stateenterprise group, the LFV Group.The Group consists of the State enterpriseLFV, the wholly owned holding companyLFV Holding AB plus the limited liabilitycompanies LFV Airport Center AB(LAC AB), Flygplatsfastigheter i LandvetterAB and Swedavia AB, which are whollyowned by the holding company. The subsidiaryArlanda Schiphol DevelopmentCompany AB (ASDC AB) is 60 per centowned by the holding company. The holdingcompany’s shares in the subsidiarySturup Handling AB were sold in Novemberto Novia Sverige AB. The associatedcompanies Nordic Airport Properties AB(NAP AB) and Nordic Airport PropertiesKB (NAP KB) are 50 per cent owned.The associated companies Cityflygplatseni Göteborg AB and Entry Point NorthAB are 40 per cent and 33 per cent owned,respectively. Cityflygplatsen i GöteborgAB, in turn, owns 100 per cent of theshares in Säve Airport AB. On behalf ofthe Swedish State, the State enterprisealso owns 50 per cent of the shares in A-Banan Projekt AB, which is thus an associatedcompany of the State enterprise.According to a decision by the SwedishGovernment, the shares in A-Banan ProjektAB will be transferred to the GovernmentOffices during 2008. LFV operatedcivil aviation traffic at 16 airports duringthe full year 2007. At two of these airports,LFV was in charge of civil aviationtraffic, which was made available througha cooperation agreement with the SwedishArmed Forces. On January 1, 2007, LFVsold Kalmar Airport to the municipality.LFV is in charge of air navigation servicesin Sweden. It operated local air trafficcontrol services at 35 airports. Two airtraffic control centres, in Malmö andStockholm, were responsible for trafficmanagement in airspace outside airportareas.The airports operated by LFV belong toa single system. The financial results at agiven airport are affected by traffic volumegenerated both at that airport and elsewherein the system. This is particularlyobvious at the airport that forms the hubof the system, Stockholm-Arlanda, whichhandles traffic that feeds in from manylocations around Sweden.The criterion for an airport to contributepositively to the system is not necessarilythat it shows a surplus whenviewed in isolation. Based on this systemapproach, deficits that arise at some airportshave been covered by surpluses atother airports. However, some airportsshow such large deficits that not even acosting analysis that takes into account allrevenue that these airports generate forthe system as a whole will show positiveearnings.Accounting principlesLFV’s accounts for the State enterpriseand the Group follow the Ordinance onAnnual Reports and Budget Material (SFS2000:605), the regulations and generaladvice of the Swedish National FinancialManagement Authority (ESV) and generallyaccepted accounting practices as providedby the Ordinance on the Accountsof Public Authorities (2000:606). To theextent there is a lack of standard settingtargeted directly to public authorities andState enterprises, LFV applies the valuationrules in the recommendations of theSwedish Financial Accounting StandardsCouncil in the manner reported in eachrespective section below.In preparing their annual reports, thesubsidiaries of LFV apply the AnnualAccounts Act and generally acceptedaccounting principles for limited liabilitycompanies.Formats and supplementarydisclosuresThe income statements, balance sheetsand funds statements have been formattedin compliance with the rules for Stateenterprises and State enterprise groups.Recommendation No. 4 of the SwedishFinancial Accounting Standards Councilon accounting for extraordinary itemsand disclosure for comparative purposesis applied.Changes in accounting principlesetcIn the income statements, balance sheets,funds statements and the notes to these,certain marginal adjustments and relocationshave been made in 2006 figures.Principles of consolidationThe consolidated accounts include theState enterprise (LFV) and those Groupcompanies in which the State enterprisedirectly or indirectly possesses more thanhalf the voting power for all shares or otherwiseexercises a controlling influence, aswell as those other companies (associatedcompanies) in which the State enterprisehas a substantial influence as a consequenceof its shareholding.SubsidiariesThe consolidated accounts have been preparedaccording to the acquisition methodof accounting.Goodwill is amortised, when applicable,over the expected utilisation period.Negative goodwill that corresponds toexpected future expenses is withdrawn asexpenses arise.The Group’s accounting principlesfor postponed (deferred) tax effects aredescribed below under the heading “Taxesand tax equivalent”.Associated companiesReported as associated companies arecompanies in which the State enterprisecan exercise substantial influence due toits holding of more than 20 per cent butno more than 50 per cent of the votingpower. With the exception of A-BananProjekt AB, these companies are reportedin the consolidated accounts accordingto the equity method of accounting.Since the Swedish State – throughLFV and the National Rail Administration(Banverket, BV) – owns 100 per centof the shares in A-Banan Projekt AB, LFVreports this associated company accordingto the proportional consolidationmethod of accounting, in compliance withthe Ordinance on Annual Reports andBudget Material. The proportional consolidationmethod means that in its balancesheet and income statement, each respectiveowner company reports its proportionof the assets and liabilities as well as theearnings of the associated company.General balance sheet valuationprincipleUnless otherwise stated, assets, liabilitiesand provisions have been valued at acquisitionvalue.Fixed assetsTangible fixed assetsTangible fixed assets are valued at theiracquisition value less depreciation. Whenapplicable, a writedown is made in themanner described below. When constructingfacilities costing substantialsums, in compliance with the Ordinanceon Annual Reports and Budget Material,interest during the construction period isincluded in acquisition value. The capitalisedamount has been determined accordingto the alternative permitted in RecommendationRR 21 of the Swedish FinancialAccounting Standards Council on borrowingcosts.LFV has no such obligations relatedto disassembly, removal, soil decontaminationand similar measures that mustbe included in the depreciable amount offixed assets.Depreciation is calculated by apportioningthe acquisition value on a straightlinebasis over the estimated utilisationperiod. Depreciation commences when anasset is ready to be placed in service for itsintended purpose. When an asset includes40 > LFV 2007 < Accounts