New Wave Group AB Annual_report_2018_EN_HQ | Page 70

NWG // FINANCIAL INFORMATION //
THE GROUP
Note 1 - Accounting policies
Basis of preparation
The consolidated financial statements
have been prepared in accordance with
the International Financial Reporting
Standards (IFRS) issued by the
International Accounting Standards
Board (IASB) as adopted by the EU.
Recommendation RFR 1 Supplementary
Accounting Rules for Corporate Groups
of the Swedish Financial Reporting
Board has also been applied, which
means that certain additional disclo-
sures are provided in the consolidated
financial statements. The accounting
policies presented in the following
description have been applied consis-
tently in the entire Group for all periods
presented in the consolidated financial
statements. The financial statements are
prepared in Swedish kronor, which is the
reporting currency of New Wave Group.
Preparing financial statements in
accordance with IFRS requires that
management make certain assessments,
estimates and assumptions. Critical
estimates and assessments are in all
essential based on historical experience
and expected future events. Estimates,
assessments and assumptions are
reviewed on a regular basis. Changes
are reported in the period in which the
change is implemented and in future
periods if these are affected. Information
on areas where applied estimates and
assessments contain an element of
uncertainty is provided in Note 2.
Fixed assets, non-current liabi-
lities and provisions consist essentially
of amounts that are expected to be
recovered or paid later than twelve
months from the balance sheet date.
Current assets and current liabilities
070 // ANNUAL REPORT
essentially consist of amounts that are
expected to be recovered or paid within
twelve months of the balance sheet date.
New and amended
accounting policies
New accounting policies for
2018
As from January 1, 2018 New Wave
Group applies IFRS 9 Financial
Instruments and IFRS 15 Revenue from
contracts with customers.
At transition to IFRS 9, no resta-
tement of prior periods has been made.
The transition to IFRS 9 Financial
Instruments has not resulted in any
material differences in the Group's valu-
ation of financial assets and liabilities,
nor in the hedge accounting. However,
under IFRS 9, credit losses are reported
earlier than under the Group’s previous
model. New Wave Group applies the
simplified model of expected credit losses
for accounts receivable under which total
expected credit 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.
IFRS 15 Revenue from contracts
with customers has been implemented
with limited retroactivity, meaning
that comparative figures have not been
restated and no transitional effect has
been recorded in equity. The majority of
New Wave Group's revenue comes from
sales of goods, which is recognised when
the control of the goods is transferred to
the customer. Variable compensations
such as discounts, bonuses and returns
are estimated and constitute a part of the
transaction price. Commission, royalties,
licenses and membership fees for
customer clubs constitute performance
obligations that are met over time as the
control is transferred to the customer.
Complete accounting principles for
financial instruments and revenue are
presented below in the sections Financial
instruments and Revenue.
No other new or revised standards
or IFRIC-interpretations published up
until 31 December 2018 are assessed to
have any impact on the financial reports
for the Group or the Parent company.
New accounting policies for
2019 and later
As from 2019, New Wave Group applies
IFRS 16 Leases.
As of January 1, 2019, IFRS 16
Leases replaces the previous standard
IAS 17 Leases. The standard removes
the splitting of leases into either opera-
tional or financial leasing for the lessee,
as required by IAS 17, and instead intro-
duces a common model for reporting of
all leases. IFRS 16 results in virtually all
leases being recognized onto the balance
sheet. According to the new standard,
lessees must report the obligation to
pay the leasing fees as a leasing liability
in the balance sheet. The right to utilize
the underlying asset during the lease
term is reported as a right of use asset.
Depreciation of the asset is recognized
in the income statement, as well as an
interest expense on the leasing liability.
Leasing fees paid are reported partly as
interest payments and partly as amorti-
zation of the leasing liability.
The standard excludes leasing agre-
ements with a lease term of less than