Annual report 2018
The Annual Report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Accounting Standards Board’s general guidelines BFNAR 2012:1 on annual financial statements and consolidated financial statements (K3).
The parent company applies the same accounting principles as the Group except as stated below in the
section “Parent company accounting principles”.
The accounting principles are unchanged from the previous year.
Assets, provisions and liabilities have been measured at cost unless otherwise stated below.
The capitalisation model is applied to the recognition of development costs. This means that expenditure arising during the development phase is recognised as an asset when all the conditions below are fulfilled:
- It is technically possible to complete the intangible asset so that it can be used or sold.
- The intention is to complete the intangible asset and to use or sell it.
- The conditions are in place for using or selling the intangible asset.
- It is probable that the intangible asset will generate future economic benefits.
- There are necessary and adequate technical, financial and other resources to complete development and to use or sell the intangible asset.
- The expenditures attributable to the intangible asset can be reliably estimated.
Internally generated intangible assets are recognised at cost less accumulated amortisation and impairment losses.
The cost of an internally generated intangible asset consists of all directly attributable expenditures (e.g. materials and salaries).
Indirect costs of production which make up more than an immaterial part of the total expenditure for production and amount to more than an insignificant amount are included in the cost.
The asset is amortised on a straight-line basis over its estimated useful life. The amortisation is recognised as an expense in the income statement.
Property, plant and equipment are recognised at cost less accumulated depreciation and impairment losses. In addition to the purchase price, the cost includes other expenditure directly attributable to the acquisition.
Additional expenditures that fulfil the criteria of an asset are included in the carrying amount of the asset.
Expenditures for ongoing maintenance and repairs are recognised as expenses when incurred.
Depreciation is applied on a straight-line basis over the expected useful life of the asset since this reflects the expected consumption of the asset’s future economic benefits. The depreciation is recognised as an expense in the income statement.
At each closing date an assessment is made as to whether there is any indication that an asset’s value is lower than its carrying amount. If such impairment is indicated the recoverable amount of the asset is calculated.
The recoverable amount is the higher of the fair value less costs to sell and the value in use. When calculating the value in use the present value of the future cash flows that the asset is expected to generate in the ongoing operations and when it is disposed of is calculated. The discount rate used is before tax and reflects the market’s assessment of the time value of money and the risks attributable to the asset. A previous impairment it is only reversed if the reasons underlying the calculation of the recoverable amount at the last impairment have changed.
All lease agreements have been classified as finance leases or operating leases. A finance lease is one in which the risks and benefits associated with ownership of an asset are essentially transferred from the lessor to the lessee. An operating lease is one that is not a finance lease.
The company has no finance leases.
The lease payments under operating leases, including increased first-time rent but excluding the costs of services such as insurance and maintenance, are expensed on a straight-line basis over the term of the lease.
Monetary items in foreign currency are translated at the rate on the closing date. Non-monetary items are not translated but are instead recognised at the rate applicable on the acquisition date.
Non-monetary items measured at fair value in foreign currency are to be translated at the exchange rate on the date that fair value was established. Other non-monetary items are not translated but are instead recognised at the rate applicable on the acquisition date.
Exchange rate differences arising on the settlement or translation of monetary items are recognised in the income statement in the financial year in which they arise.
Inventories are recognised at the lower of cost and net realisable value. In addition, provision is made for obsolescence.
Net realisable value is calculated based on average cost in the form of a calculated standard price, since
this is assessed to be the best way to achieve correct data for valuing the inventory.
Standard pricing is calculated using a model that takes into account purchase price, exchange rates, quantities and replacement costs, among other things.
In some cases major revisions or adjustments are made to a product. Cost and net realisable value are generally difficult to determine for these customised items.
For semi-finished and finished goods produced by the Company the cost consists of the direct costs of production and indirect costs which make up more than an immaterial part of the total expenditure for production.
For these products the lowest value at which the products are recognised is established by calculating the average manually. In the absence of relevant purchase prices the standard price is used when determining the lower of cost or market.
Financial assets and liabilities are recognised in accordance with chapter 11 of BFNAR 2012:1 (Financial instruments measured at cost).
On initial recognition, financial assets are recognised at cost, including any transaction costs directly attributable to the acquisition of the asset.
After initial recognition, financial current assets are measured at the lower of cost and net realisable value on the closing date.
Trade receivables and other receivables that are current assets are measured individually at the amount expected to be received.
After initial recognition, financial non-current assets are measured at cost less any impairment losses and plus any upward revaluations.
For defined contribution plans the Company makes fixed payments to another company, normally an insurance company, and the Company has no further obligation to the employee once the contribution has been paid. The level of the employee’s benefits after employment has ended depends on the payments made and the return on the capital.
The payments for defined contribution plans are recognised as expenses. Unpaid contributions are recognised as a liability.
A provision is recognised in the balance sheet when the Company has a legal or constructive obligation as a result of an event that has occurred and it is likely that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
On initial recognition, provisions are measured at the best estimate of the amount expected to be required to settle the obligation at the closing date. Provisions are reviewed at each closing date.
A contingent liability is:
- a potential obligation attributable to past events, the existence of which will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events that are not entirely within the Company’s control, or
- an existing obligation due to past events which has not been recognised as a liability or provision since it is unlikely that an outflow of resources will be required to settle the obligation or the size of the obligation cannot be estimated with sufficient reliability.
Contingent liabilities is a collective term for warranties, financial commitments and other obligations that are not included in the balance sheet.
The inflow of financial benefits that the Company has received or will receive on its own behalf is recognised as income. Income is measured at the fair value of what has been received or will be received less discounts.
For sales of goods the income is recognised on delivery.
A public subsidy that is not associated with a requirement of future performance is recognised as income when the conditions for receiving the subsidy are fulfilled. A public subsidy that is associated with a requirement of future performance is recognised as income upon completion of performance. If the subsidy was received before the conditions for recognition as income were fulfilled, the subsidy is recognised as a liability.
Public subsidies related to assets are recognised in the balance sheet by reducing the recognised value of the asset by the amount of the subsidy.
Subsidiaries are companies in which the parent company directly or indirectly holds more than 50% of the voting rights or otherwise has a controlling interest. Controlling interest means a right to determine a company’s financial and operating strategies for the purpose of obtaining economic benefits. Business combinations are recognised based on the entity concept. This means that the purchase price allocation is prepared as of the date on which the acquiring party gains a controlling interest. From and including this date the acquirer and the acquired entity are seen as one accounting entity. The application of the entity concept also means that all assets (including goodwill) and liabilities, as well as income and expenses, are included in full even for partly owned subsidiaries.
The cost of a subsidiary is calculated as the total of the fair value, at the acquisition date, of assets acquired plus liabilities that have arisen or been taken over as well as equity instruments issued, costs directly attributable to the business combination and any contingent consideration. The purchase price allocation establishes the fair value, with a few exceptions, at the acquisition date of acquired identifiable assets and liabilities taken over as well as minority interests. Minority interests are measured at fair value at the acquisition date. From and including the acquisition date the consolidated financial statements include the acquired company’s income and expenses, identifiable assets and liabilities as well as any goodwill or negative goodwill arising.
No intra-Group transactions have taken place during the current year.
The parent company’s accounting principles are the same as the accounting principles stated above for the consolidated financial statements, except in the cases below.
An exchange rate difference that relates to a monetary item that forms part of the parent company’s net investment in a foreign operation and that is measured at cost is recognised in the income statement if the difference arose in the parent company.
Shareholder contributions given without shares being issued or other equity instruments being received in exchange are recognised in the balance sheet as an increase in the carrying amount of the interest.