SECURITAS AB Annual Report 2011

Notes
Note 39. Accounting principles
The Parent Company’s financial statements are prepared in accordance with
the Swedish Annual Accounts Act and the Swedish financial Reporting
Board’s standard RFR 2 Accounting for Legal Entities. The Parent Company
thus follows the same accounting principles as the Group when relevant
and except in the cases stated below. The differences that exist between
the Parent Company’s and the Group’s accounting principles are a result of
the restrictions that the Swedish Annual Accounts Act, the Swedish Act on
Safeguarding of Pension Commitments and the options that RfR 2 allow
for IFRS in the Parent Company.
IFRS 3 Business combinations
The Parent Company measures the acquisition cost as the sum of the acquisition-date
fair values of assets transferred, liabilities incurred and all costs
that are directly attributable to the acquisition. Contingent considerations
are recognized as part of the acquisition cost if it is probable that they will be
realized. The acquisition cost is adjusted in subsequent periods if the initial
assessment needs to be revised.
IAS 17 Leasing
A complete implementation on legal entity level of accounting for finance
leases is sometimes difficult to achieve since specific ordinances for the
taxation based on such accounting are not available or are not complete.
Finance leases can therefore on legal entity level be accounted for according
to the requirements for operational leases. This limitation lacks practical
implications since the Parent Company has not entered into any leasing
agreements that could be classified as finance leases.
IAS 18 Revenue
Anticipated dividend from a subsidiary is recognized as income in the Parent
Company in accordance with RFR 2 if the Parent Company has the exclusive
right to decide the amount of the dividend from the subsidiary. The Parent
Company must furthermore ensure that the dividend is in line with the subsidiary’s
dividend capacity. Extra dividends are sometimes a complement to
the anticipated dividend. If so, they are accounted for on a cash basis. Group
contributions received by the Parent Company are equal to dividends and
are thus recognized as financial income in the income statement.
IAS 19 Employee benefits
Accounting for defined benefit plans according to the Swedish Act on
Safeguarding of Pension Commitments leads to differences between the
accounting in the Parent Company and the Group. These differences have
no material impact on the employee benefits relating to the employees of
the Parent Company. Pension solutions either fall within the framework of
the ITP–plan that is insured via Alecta, which is described in note 31, or in
all material aspects consist of other defined contribution plans.
IAS 21 Effects of changes in foreign exchange rates
Paragraph 32 in IAS 21 states that exchange differences that form part of a
reporting entity’s net investments in a foreign operation shall be recognized
via the statement of income in the separate financial statements of the
reporting entity. RFR 2 states that such exchange differences instead should
be recognized directly in shareholders’ equity in accordance with paragraph
14 d in chapter 4 of the Swedish Annual Accounts Act. Securitas AB follows
RFR 2 and recognizes exchange differences that fulfills the criteria for net
investment hedges, that is for which settlement is neither planned nor likely
to occur in the foreseeable future, via the translation reserve in equity.
Annual Report
Notes and comments to the Parent Company financial statements
IAS 39 Financial instruments: Recognition and measurement
The Parent Company follows IAS 39 with the exception of financial guarantees
in relation to subsidiaries. For further information refer to the accounting
principles adopted by the Group for recognition and measurement of
financial instruments in note 2.
Capital contributions
Shareholders’ capital contributions are accounted for as an increase of the
balance sheet item shares in subsidiaries. An assessment whether any
impairment write-down is required in shares in subsidiaries is subsequently
made.
RFR 2 Group contributions paid
The Swedish financial Reporting Board‘s statement ufR 2 Group contributions
and capital contributions has been withdrawn and replaced by guidance
in RFR 2 Accounting for Legal Entities. Securitas AB has consequently
changed its accounting principle for group contributions paid. As of 2011,
they are accounted for on the line other financial income and expenses, net
in the statement of income.
The effect on the restated comparative year 2010 is that group contributions
paid have impacted other financial income and expenses, net with
MSEK -497.4. The tax effect on these group contributions are no longer
accounted for in retained earnings. Instead the tax effect has impacted
deferred taxes in the income statement with MSEK 130.8. Consequently,
net income for the year 2010 has decreased by MSEK -366.6 while
retained earnings have increased with the same amount. There is thus no
change in total shareholders’ equity.
for 2009 the change in accounting principle has impacted the line dividend
with MSEK 500.2 and the line other financial income and expenses, net
with MSEK -500.2. There has been no impact on total financial income and
expenses, net income for the year 2009 or on retained earnings.
Securitas share based incentive scheme
In addition to the Group’s accounting principles for share-based payments
(IFRS 2) as described in note 2 Accounting principles, the following has
been applied in the Parent Company’s financial statements. The Parent
Company has secured the delivery of shares according to Securitas share
based incentive scheme by entering into a swap agreement with a third
party regarding purchase of shares. To the extent that shares according to
the swap agreement is subject to delivery to employees in other Group
companies than the Parent Company, a liability to Group companies has
been recorded in the Parent Company’s accounts. This liability is recorded
at the value of the commitment that Securitas AB has to the subsidiaries to
deliver shares, that is the number of shares to be delivered according to the
swap agreement at the latest share price for Securitas AB’s series B share.
Social security expenses are calculated based on the market value of the
shares that potentially will be allocated. Fluctuations in the share price for
these shares thus lead to changes in social security expenses that impact
the Parent Company’s and Group’s income. This is the only impact on the
Parent Company’s and Group’s income due to fluctuations in the share price
for the shares that potentially will be allocated. This means that any possible
increase or decrease of the liability to Group companies has not been
accounted for in the Parent Company’s income statement.
Securitas Annual Report 2011
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