NWG // THE GROUP AND THE PARENT COMPANY
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Notes
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Note 1 - Accounting policies
Note 2 - Risks and risk control
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. Applied
accounting policies are otherwise consistent with the
2019 annual report.
New accounting policies for 2020
A number of amendments of current accounting standards
have been published and is effective from 2020
and later. None of these has a material impact on New
Wave Group´s financial statements.
Accounting for government grants
In the annual report for 2019 the Group has not
described the accounting principles related to
accounting for government grants due to that the
amounts were insignificant. During 2020 the Group
has received grants from governments around the
world related to actions that have been introduced
due to the outbreak of COVID-19 . Government grants
are recognized in the Group´s consolidated balance
sheet and the Group´s consolidated income statement
when there is reasonable assurance that the entity will
comply with the conditions attached to them and the
grants will be received. Grants related to expenses are
classified as other operating income in the Group´s
consolidated income statement and is recognized on
a systematic basis over the same period in which the
Group recognizes the related expenses for which the
grants are intended to compensate.
During 2020 the Group has received government
loans related to the actions that have been introduced
due to the outbreak of COVID-19. A government loan
is initially measured at fair value less transaction costs
and after the initial valuation measured at amortized
cost by applying the effective interest method.
If there is a possibility to receive loan forgiveness
an assessment is performed to determine whether
it is reasonable certain that the Group will meet the
requirements to receive a loan forgiveness. If the
assessment is that there is reasonable assurance that
the Group will meet the requirements the government
loan will be recognized as other operating income in
the Group´s consolidated income statement.
New Wave Group’s international operations mean that
it is continuously exposed to various financial risks.
The financial risks are interest rate risks, currency,
liquidity and credit risks. In order to minimize the
effect these risks may have on earnings, the Group has
a financial risk policy. For a more detailed description
of the Group’s risk management please refer to the
Annual Report 2019, note 17, p. 92-98. The Annual
Report is available at the Group’s headquarters in
Gothenburg, Sweden, as well as at www.nwg.se.
The Group’s policy is to have short fixed-rate
interest periods, which means that fluctuating
short-term interest rates have a rapid impact on the
Group’s net interest income.
During the first quarter of 2020, the world was
hit by a pandemic caused by the coronavirus. New
Wave Group has been largely affected by the spread of
COVID-19 and the demand for the Group’s products
and services has been significantly reduced in particular
during the second quarter of 2020. It is still hard
to assess the development for the coming quarters.
Measures taken include, among other things, that the
Annual General Meeting has decided that no dividend
for the 2019 financial year will be issued and that
the Group has applied for and received government
grants in several countries. The Group’s customers
also suffer from the negative effects of the pandemic,
which leads to an increased credit risk. The companies
within the Group attach great importance to monitoring
the customers’ ability to pay and continuously
make assessments regarding adequate credit risk
provisions.
Besides the above, the Group’s reported risks are
deemed to be essentially unchanged.
23 // Q2