New Wave Group AB Annual_report_2018_EN_HQ | Page 72

NWG // FINANCIAL INFORMATION //
THE GROUP
on favourable terms. Transaction costs are reco-
gnised in the income statement when incurred. The
acquirer can choose to recognise a non-controlling
interest either at fair value (“full goodwill”) or at its
share of the acquired net assets.
In the first alternative the non-controlling
interest and goodwill will increase in value by the
same amount. Changes in value relating to contracted
supplementary considerations are accounted for in
the income statement. Under IFRS 3, 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 recognised in the consolidated income statement
from the acquisition date. Any gain or loss from
the sale of operations during the year is calculated
based on the Group’s recognised net assets in such
operations, including result up to the date of sale.
Intercompany balances and any unrealised income
and expenses attributable to intercompany transac-
tions are eliminated.
The non-controlling interest’s share of the subsi-
diaries’ net assets is accounted for as a separate
item under consolidated equity. In the consolidated
income statement the non-controlling interest’s
share is included in reported result.
Associated companies are those companies which
are not subsidiaries but where the Parent company
directly or indirectly has a significant influence.
Shares in associated companies are accounted
for using the equity method. In the consolidated
income statement, the Group’s share of the asso-
ciated companies' result is recorded. In the Group’s
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.
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 trans-
lated at the exchange rates prevailing at the closing
day. Exchange gains and losses related to accounts
receivable and payables and other operating recei-
vables and payables are included in other operating
income and other operating expenses. Exchange
gains and losses related to other financial assets
072 // ANNUAL REPORT
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 definied as separate performance
obligations. Sales are mainly to retailers in Corporate
and Retail. Normally, contracts or customer orders
are used as basis for assessing whether an agreement
with the customer exists. Fulfillment of the perfor-
mance obligations under the agreements are deemed
to be achieved when the control of the goods is trans-
ferred to the customer. New Wave Group assesses
that moment with the help of shipping documents
and shipping terms.
Variable compensations such as discounts,
bonuses and returns are estimated and form part
of the transaction price. Commission, royalties,
licenses and membership fees for customer clubs
constitute performance obligations that are met over
time. Within the Group there are also a few smaller
contracts with repurchase commitments where New
Wave Group delivers goods to the customer with full
repurchase right at the same price as the original
sale. Revenue is reported at the end of the repurchase
right period.
The Group has a number of sponsorship agre-
ements, which imply an exchange of goods and
services between the contractual parties. In case the
Group identifies distinct performance obligations,
revenue is recognized at the fair value of the trans-
ferred products.
Accounting policies
for the comparison year
Transactions before January 1 2018 are reported
according to previous accounting policies, which are
presented in Note 1 in the annual report for 2017.
Intangible fixed assets
An intangible asset is an identifiable, non monetary
asset without physical substance. Intangible assets
which can be identified and measured separately
from goodwill upon acquisition consist, for instance,
of customer-, contract- and/or technology-related
assets. Typical marketing- and customer-related
assets comprise trademarks and customer rela-
tions. Contracts and customer relations derive from
expected customer loyalty and the cash flows that