THE GROUP AND THE PARENT COMPANY
NOTES
ACCOUNTING PRINCIPLES
This report is prepared in accordance with IAS 34 Interim Financial Reporting and the Annual Accounts Act. The
interim report for the Parent Company has been prepared according the Annual Accounts Act as well as RFR 2
“Reporting for Legal Entities”. New accounting principles for 2018 are described in the Annual Report for 2017,
"Note 1 Accounting Policies" under "New and amended IFRS introduced ". Applied accounting principles are
otherwise consistent with the 2017 annual report.
NEW ACCOUNTING PRINCIPLES FOR 2018
Most of New Wave Group's revenue comes from sales of goods,
which is reported when the control of the goods is transferred to
the customer. Variable compensation such as discounts, bonuses and
returns is estimated and part of the transaction price.
On 1 January 2018, IFRS 15 Revenue from contracts with customers
and IFRS 9 Financial Instruments came into force.
IFRS 9 "Financial Instruments" has been applied by the Group
since 1 January 2018. The transition to IFRS 9 has not resulted
in any differences in the Group's valuation of financial assets and
liabilities. The Group’s hedge accounting is consistent with the new
hedge accounting rules.
Revenues 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.
IFRS 15 implies additional disclosure requirements regarding
revenue, which results in New Wave Group’s revenue being presented
in more categories than before. Therefore, revenue is also presented
allocated to our two sales channels, promo and retail, as shown in
the notes.
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.
NEW ACCOUNTING PRINCIPLES FOR 2019
IFRS 16 "Leases" will replace IAS 17 "Leases" as of 1 January 2019.
The effect of implementing IFRS 16 will be an increased balance sheet
total with higher tangible fixed assets and higher financial liabilities.
There will also be a shift in the consolidated income statement with
a positive effect on operating result and a negative impact on net
financial items.
The transition has not resulted in any transition effect that needs to
be presented.
For a more detailed description of the new accounting principles, see
the Annual Report 2017, "Note 1 Accounting Policies" and "New and
amended IFRS introduced".
During the third quarter the Group conducted training within the
organization, in the new standard and in the implemented system.
Evaluation of all contracts is still ongoing, as is the work to evaluate
the full effect of IFRS 16 and its impact on the Group's key ratios.
IFRS 15 "Revenue from Contracts with Customers" has been applied
by the Group since 1 January 2018 and has been implemented with
limited retroactivity. The transition has not resulted in any transition
effect.
RISKS AND RISK CONTROL
New Wave Group’s international operations mean that it is
continuously exposed to various financial risks. The financial risks
are currency, borrowings and interest rate risks, as well as liquidity
and credit risks. In order to minimize the impact these risks may have
on earnings, the Group has established a financial policy. For a more
detailed description of the Group’s risk management please refer to
the Annual Report 2017, note 17, p.81–85. www.nwg.se.
The Group’s policy is to have short fixed-interest agreements resulting
in quick effects on the Group’s net interest as the short-term interest
rate changes.
The Group’s reported risks are deemed to be essentially unchanged.
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