This is the first annual report prepared in accordance with IFRS. The accounting policies found in Note 2 were applied when the consolidated financial statements for the Azelio Group were prepared on 31 December 2019, and applied to the comparable information presented as per 31 December 2018 and to the preparation of the opening statement of financial position (opening IFRS balance sheet) on 1 January 2018 (the date on which the Group made the transition to IFRS).
When the opening IFRS balance sheet dated 1 January 2018 and the balance sheets dated 31 December 2018 were prepared according to IFRS, the amounts reported in previous annual reports and interim reports in accordance with BFNAR 2012:1 Annual Report and Consolidated Accounts (K3) were adjusted. An explanation for how the transition from previously applied accounting policies to IFRS impacted the Group’s earnings and financial position is shown in the tables below and the accompanying notes.
The transition to IFRS is reported in accordance with the standard IFRS 1 First-time Adoption of International Financial Reporting Standards. The general requirement is that all applicable IFRSs and IASs that have entered force and been adopted by the EU as of 31 December 2019 must be applied retroactively. However, IFRS 1 contains transitional provisions that provide entities with a certain degree of choice.
The exemptions permitted by IFRS from full retrospective application of all standards that Azelio elected to apply to the transition from the former accounting policies to IFRS are stated below.
IFRS 1 allows for accumulated translation differences recognised in equity to be set at zero at the date of the transition to IFRS. This provides transition relief compared with determining the accumulated translation differences in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, from the date on which the subsidiary or associated company was formed or acquired. Azelio has chosen to set at zero all accumulated translation differences in the translation reserve and to reclassify these to retained earnings at the date of the transition to IFRS as of 1 January 2018.
According to IFRS 1, the Group is to present a reconciliation between equity and total comprehensive income recognised according to previously applied accounting policies, and equity and total comprehensive income recognised according to IFRS. The tables below outline the reconciliation between previously applied accounting policies and IFRS for the respective periods for equity and total comprehensive income.