Note 2 – Key estimates and assumptions
NWG // FINANCIAL INFORMATION //
THE GROUP
in foreign subsidiaries are translated to SEK using exchange rates at year-end ( closing rate ). Exchange rate differences are recognized in other comprehensive income and accumulated in equity .
Transactions and balance sheet items in foreign currency
Transactions in foreign currency are translated to each company ’ s functional currency at the exchange rate prevailing at the respective transaction date . Receivables and liabilities in currencies other than the functional currency are translated using the closing rate . Exchange rate differences related to accounts receivable , accounts payable and other operating assets and liabilities are recorded as other operating income and other operating costs . Exchange rate differences related to financial assets and liabilities are recorded as financial income and expenses .
Classification of balance sheet items
Fixed assets , non-current liabilities 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 essentially consist of amounts that are expected to be recovered or paid within twelve months of the balance sheet date . A liability is classified as short-term if New Wave Group does not have an unconditional right to postpone settlement of the debt beyond twelve months from the balance sheet date .
New and amended accounting policies
New accounting policies for 2023
Several amendments to existing standards have been published and will enter into force in 2023 and later . One of these is changes in IAS 1 – Disclosure of accounting principles . By applying the changes , a company inform of its essential accounting principles , instead of its significant accounting principles . To support the changes , the IASB has also developed guidance and examples to explain and identify a significant accounting principle . This change has resulted in clarifications and reformulations of information on applied accounting principles . Other changes are not considered to have a significant impact on New Wave Group ' s financial reports .
New accounting policies for 2024 and later
New Wave Group is covered by the new OECD ’ s Pillar two model rules , adopted into Swedish law as of January 1 , 2024 . These rules may result in a Top-up tax for the Group in some jurisdictions , where the effective tax rate according to Pillar two is below a minimum tax rate of 15 %. Management currently evaluates if there are jurisdictions in which Top-up tax may be imposed . The initial assessment is that there is no significant exposure for Top-up tax . There are no published changes to IFRS and IFRIC to be applied in the future that are expected to have any significant impact on the Group ’ s reporting .
From January 1 , 2024 amendments in IAS 1 Presentation of Financial Statements come in to force clarifying when liabilities are to be classified as short-term .
Furthermore there have been minor amendments to IFRS 16 Leases for the requirements for sale and leaseback transactions and new disclosure requirements for supplier finance arrangements in IAS 7 Statement of Cash Flows and IFRS7 Financial Instruments : Disclosures .
The amendments that will be in force from January 1 , 2024 are approved by EU .
Note 2 – Key estimates and assumptions
Preparing the consolidated financial statements requires that management and the Board make certain estimates and assumptions . These estimates and assumptions are in all essential based on historical experience and expected future events . These estimates and assumptions affect reported assets and liabilities , as well as revenue and costs . Changes are reported in the period in which the estimates and assumptions are changed and in future periods if these are affected . Estimates and assumptions that may have a significant effect on the Group ’ s earnings and financial position are presented in each note where appropriate .
Source of estimation uncertainty and critical judgments
Impairment of goodwill and other intangible fixes assets
Measurement of lease liabilities and right-of-use assets
Deferred taxes and uncertainty over income tax treatments and claims
Write down of inventories
Reserve for expected credit losses
Note
Note 8 Intangible fixed assets
Note 9 Tangible fixed assets
Note 12 Taxes
Note 15 Inventory
Note 16 Financial instruments and financial risk management
ANNUAL REPORT // 077