Annual report 2012 - Comrod

Annual report 2012 66/92Strategies and values | Group | Parent company | Corporate governance | ContactFinancial statement Notes Auditors reportNotes parent companyAccounting policiesThe annual accounts have been prepared inaccordance with the provisions of the AccountingAct and generally accepted accounting principlesin Norway.Sales revenueRevenue from services is recognized as servicesare rendered. Interest income is recognized asinterest accrues. Dividend from subsidiaries arerecognized as dividend are earned. Dividend fromothers than subsidiaries is recognized when theshareholders’ right to receive the payment isestablished by the annual general meeting.Classification and measurement of balance sheetitemsCurrent assets and liabilities include itemsdue for payment within one year of the dateof acquisition and items which are part of theoperating cycle. Other items are classified asnon-current assets/liabilities.Current assets are measured at the lower of costof acquisition and fair value. Current liabilitiesare recognized at nominal value on the date ofcommencement.Non-current assets are measured at the cost ofacquisition, but are written down to fair value ifimpairment is identified which is not consideredto be of a temporary nature. Non-currentliabilities are recognized at nominal value on thedate of commencement. Costs associated withthe bond issue are amortized over the duration ofthe loan using the effective interest method.ReceivablesTrade and other receivables are recognized in thebalance sheet at their nominal value, followingdeductions for provisions for expected losses.Provision for losses is made on the basis of theindividual claims. There is also an unspecifiedprovision to cover expected losses on other tradereceivables.Assets and liabilities in foreign currencyTransactions in foreign currencies are recognizedat the exchange rate in effect at the transactiondate. Monetary items in foreign currency aremeasured using the exchange rate in effect at thebalance sheet date. Currency gains/losses onreceivables/liabilities are classified as financialitems.SharesThe cost method of accounting is used for allshares. Investments in subsidiaries are financedthrough long term loans in the subsidiary’sfunctional currency. Translation effects onthe long term loan are recorded toward theinvestment in the balance sheet as hedging ofnet investment. Tax effects arising from thetranslation effects are recorded towards equity.Share-based paymentSenior executives in the group have receivedoptions to subscribe for shares in the parentcompany. The fair value of the share optionsis measured at the grant date and the costis recognized, together with a correspondingincrease in other paid-in capital, over the66