NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 71

NWG // FINANCIAL INFORMATION //
New accounting policies for
2020 and later
A number of amendments of current
accounting standards have been published
and is effective from 2020 and later. None
of these are considered to have a material
impact on New Wave Group´s financial
statements.
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 percent 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. Internal profits and losses arising
from sales between Group companies have
been fully eliminated.
Acquisitions and goodwill
All acquisitions are recorded using the
purchase method. The acquisition value
is defined as the sum of the fair values of
the assets received, liabilities incurred or
assumed and equity instruments issued by
New Wave Group to acquire the operation.
The acquisition value of shares in
Group companies is eliminated against
equity in each subsidiary at the time of
acquisition. If the transferred conside-
ration for the shares exceeds the fair value
of the acquired company’s net assets,
consolidated goodwill is recognized.
Under this method, only the portion of
equity in the Group company 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 recognized in
the income statement as an acquisition on
favorable terms.
THE GROUP
Transaction costs are recognized in the
income statement when incurred. The
Group decides whether the non-con-
trolling interest shall be valued at fair
value or at the non-controlling interest´s
proportionate share of the net assets or at
its share of the acquired net assets.
Changes in value relating to
contracted supplementary considerations
is valued at fair value through the Group’s
consolidated income statement and are
recognized as other operating income or
other operating costs in the Group´s conso-
lidated income statement if the changes
occur within one year after the acquisition
date. All changes in the equity stake in a
subsidiary, where the controlling influence
does not cease, should be accounted for as
equity transactions.
Result from operations acquired
during the year are recognized in the
consolidated income statement from the
acquisition date. Any gain or loss from the
sale of operations during the year is calcu-
lated based on the Group’s recognized
net assets in such operations, including
result up to the date of sale. Intercompany
balances and any unrealized 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 consoli-
dated equity. In the consolidated income
statement, the non-controlling interest’s
share is included in reported result.
Associated companies
Associated
companies
are
those
companies which are not subsidiaries but
where the Parent company directly or indi-
rectly has a significant influence. Shares
in associated companies are accounted
for using the equity method. In the conso-
lidated income statement on the row
shares of associated companies’ result, the
Group’s share of the associated companies'
result after tax is recorded. In the Group’s
consolidated balance sheet the shares in
associated companies are recorded at cost
and adjusted based on the Group’s share
of the result after the acquisition date and
any received dividends.
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 have
been translated at the exchange rates
prevailing at the closing day. Exchange
gains and losses related to accounts
receivable, accounts payable and other
operating receivables and payables are
included in Other operating income and
Other operating costs. Exchange gains
and losses related to other financial assets
and liabilities are included in financial
income and financial expenses.
Revenue
Most of New Wave Group's revenue
comes from sales of goods, which are
defined as separate performance obli-
gations. Sales are mainly to retailers in
promo and retail. New Wave Group´s
contracts with customers are primarily
contracts with no agreed volumes or
there is no existing contract and general
terms apply. Therefore, a binding contract
occurs, in main part of the sales, when a
customer order is received and confirmed.
Fulfillment of the performance obliga-
tions under the contracts are deemed to
be achieved when control of the goods is
transferred to the customer. New Wave
Group assesses that moment with the
help of shipping documents and shipping
terms, which vary within the Group.
The transaction price primarily
consists of a fixed price per sold quantity.
Variable parts, such as discounts, bonuses
and returns, only occur to a small extent
and then reduces the transaction price. At
the balance sheet date, a repayment liability
for accrued bonuses, kick-backs and
rebates are recorded as accrued expenses
and prepaid income in the consolidated
balance sheet.
ANNUAL REPORT // 071