FINANCIAL INFORMATION THE GROUP
No other new or revised IFRS are expected to have a significant impact on New Wave Group ' s financial reports .
ACCOUNTING PRINCIPLES FOR LOAN AND CUSTOMER BENEFITS FROM 1 JANUARY 2018 Loans are non-derivative financial assets with fixed or determinable payments not listed on an active market . They are initially reported at fair value and current at amortized cost . The expected maturity of accounts receivable is short , so the value is reported at nominal amount without discounting .
Trade receivables have been recognized to the amounts that they are expected to accrue . New Wave Group applies the simplified model of expected loan losses for accounts receivable under which total expected loan losses for the remaining maturity of the receivable are reported . When assessing future expected credit losses , historical and forward-looking information is taken into account .
Losses attributable to bad debts are recognized in the income statement under external costs . Interest income relating to loan receivables and accounts receivable is reported as a financial income .
ACCOUNTING PRINCIPLES FOR REVENUE FROM 1 JANUARY 2018 Most of New Wave Group ' s revenue comes from sales of goods . Normally , contracts or customer orders are used as basis for assessing whether an agreement with the customer exists . Fulfillment of the performance commitments under the agreements are deemed to be achieved when the control of the goods is transferred to the customer . New Wave Group assesses that moment with the help of shipping documents and shipping terms .
Variable compensation such as discounts , bonuses and returns is estimated and is part of the transaction price .
Revenue from commission , royalties , licenses and membership fees for customer clubs constitute performance commitments that are met over time as the control is transferred to the customer .
Within the Group there are also a few smaller contracts with repurchase commitments where New Wave Group delivers goods to the customer with full return right at the same price as the original sale . Revenue is reported at the end of the return period .
CONSOLIDATED FINANCIAL STATEMENTS AND PRINCIPLES OF CONSOLIDATION
The consolidated financial statements comprise the Parent Company New Wave Group AB and all companies in which New Wave Group AB directly or indirectly holds more than 50 % of the voting rights or otherwise exercises a controlling influence . In assessing whether a controlling influence exists , potential shares entitling the holder to vote that can be used or converted without delay are taken into account .
ACQUISITIONS & GOODWILL All acquisitions are recorded using the purchase method . The acquisition value is defined as the sum of the fair values of the assets paid , liabilities incurred or assumed and equity instruments issued by New Wave Group to acquire the operation .
The cost of shares in subsidiaries is eliminated against equity in each subsidiary at the time of acquisition . If the transferred consideration for the shares exceeds the value of the acquired Company ’ s net assets consolidated goodwill is recognised . Under this method , only that portion of equity in the subsidiary that has been generated after the acquisition date is included in equity attributable to the shareholders of the parent company . If the portion of the fair value of the acquired net assets exceeds the cost of the acquisition , the difference is recognised in the income statement as an acquisition on favourable terms . Transaction costs are to be recognised in the income statement as incurred . The acquirer can choose to recognise a non-controlling interest either at fair value (“ full goodwill ”) or at its share of the acquired net assets . In the first alternative the non-controlling interest and goodwill will increase in value by the same amount . Changes in value relating to contracted supplementary considerations are accounted for in the income statement . Under IFRS 3 , all changes in the equity stake in a subsidiary , where the controlling influence does not cease , should be accounted for as equity transactions .
Earnings from operations acquired during the year are recognised in the consolidated income statement from the acquisition date . Any gain or loss from the sale of operations during the year is calculated based on the Group ’ s recognised net assets in such operations , including earnings up to the date of sale . Intercompany balances and any unrealised income and expenses attributable to intercompany transactions are eliminated .
The non-controlling interest ’ s share of the subsidiaries ’ net assets is accounted for as a separate item under consolidated equity . In the consolidated income statement the non-controlling interest ’ s share is included in reported profit / loss .
Associated companies are those companies which are not subsidiaries but where the Parent Company directly or indirectly has a significant influence . Interests in associated companies are accounted for using the equity method . In the consolidated income statement , the Group ’ s share of the associated company ’ s profit is recorded . In the Group ’ s balance sheet the shares in associated companies is recorded at cost and adjusted based on Group ’ s share of the profit after the acquisition date .
TRANSLATION OF ITEMS DENOMINATED IN FOREIGN CURRENCY
Transactions in foreign currencies during the year have been translated at the exchange rate prevailing at the respective transaction date . Assets and liabilities denominated in a foreign currency , primarily receivables and payables and loans , have been translated at the exchange rates prevailing at the balance sheet date . Exchange gains and losses related to trade receivables and payables and other operating receivables and payables are included in other operating income and other operating expenses . Exchange gains and losses relating to other financial assets and liabilities are included in financial income and financial expenses .
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