NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 74

NWG // FINANCIAL INFORMATION //
Financial instruments with a remaining
maturity of less than twelve months is
normally classified as as current assets
and liabilities and financial instruments
that exceed twelve months is normally
classified as non-current assets and
liabilities.
A financial asset is derecognized from
the Group´s consolidated balance sheet
when the rights inherent in the agree-
ment are realized or expires or if the
Group loses control over them. The same
applies to a portion of a financial asset. A
financial liability is derecognized from the
Group´s consolidated balance sheet when
the obligation in the agreement is fulfilled
or otherwise ceases to apply. The same
applies to part of a financial liability.
On the acquisition date, New Wave
Group classifies financial instruments
into the following categories:
Financial assets measured at
amortized cost
The Group’s financial assets measured at
amortized cost are essentially accounts
receivable, other receivables and liquid
assets. Liquid assets comprise liquid bank
deposits and available cash. Accounts
receivable include invoiced as well as
non-invoiced receivables (recognized
when the Group’s right to payment is
assessed as unconditional). The expected
maturity of accounts receivable is short,
and the value is therefore recognized at
nominal amount without discounting.
New Wave Group applies the
simplified model for expected credit
losses on accounts receivable, at which
total expected credit losses for the
remaining maturity of the receivable
are recognized. When assessing future
expected credit losses, both historical and
forward-looking information is taken into
account. Change of provision for expected
credit losses on accounts receivable is
recognized in the income statement under
external expenses. The change of the year
is provided in note 17.
074 // ANNUAL REPORT
THE GROUP
Financial assets measured at
fair value through profit and
loss
The Group does not have any financial
assets measured at fair value in the income
statement in 2019 and 2018.
Financial assets measured
at fair value through other
comprehensive income
New Wave Group uses derivatives, essen-
tially currency futures, to manage financial
risks. Financial instruments measured at
fair value through other comprehensive
income consist of hedge instruments which
form part of an effective cash-flow hedge.
Changes in value for such instruments
are recognized in other comprehensive
income. Cash-flow hedges are reclassified
to the income statement in the period or
periods when the hedged flows affect the
Group’s consolidated income statement.
However, if a planned transaction or an
assumed obligation is no longer expected
to occur, the cumulative gain or loss recog-
nized in other comprehensive income,
from the period in which the hedge was
applied, is immediately transferred to the
Group´s consolidated income statement.
Disclosures on individual hedges are
provided in note 17.
Financial liabilities measured at
amortized cost
The Group’s financial liabilities measured
at amortized cost are essentially inte-
rest-bearing liabilities, accounts payable,
other liabilities and accrued expenses.
Interest-bearing liabilities consist of
liabilities to credit institutions and lease
liabilities, see section Leases for measu-
rement and valuation of lease liabilities.
After the initial valuation, to fair value less
transaction costs, liabilities to credit insti-
tutions are measured at amortized cost by
applying the effective interest method. The
expected maturity of accounts payable is
short and the item is therefore recog-
nized at the nominal amount without
discounting.
Financial liabilities measured
at fair value through profit and
loss
Financial liabilities measured at fair
value through the income statement
consist of liabilities related to contracted
supplementary considerations. Changes
in value relating to contracted supple-
mentary 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 consolidated income
statement if the changes occur within one
year after the acquisition date.
Financial liabilities measured
at fair value through other
comprehensive income
New Wave Group uses derivatives,
essentially currency futures, to manage
financial risks. See section Financial
assets measured at fair value through other
comprehensive income for a description on
measurement and valuation.
Leases
The Group assesses at contract inception
whether an agreement is, or contains, a
lease. That is, if the agreement conveys
the right to control the use of an identified
asset for a period of time in exchange for
considerations. The Group once again
assesses if an agreement is or contains a
lease if the terms and conditions of the
agreement change.
Lease agreements are recognized
as right-of-use assets as well as interest-
bearing lease liabilities in the Group´s
balance sheet. Lease liabilities are recog-
nized within long-term interest-bearing
liabilities and short-term interest-bearing
liabilities in the Group´s balance sheet
and are measured at the present value of
future lease payments. In calculating the
present value of lease payments, the Group
uses its incremental borrowing rate at the
lease commencement date if there does not
exist an implicit rate in the agreement. The