Notes for P&L

Applied regulations

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards) as adopted by the EU and the Annual Accounts Act and RFR 1 Supplementary Accounting Rules for Groups.

The financial statements are prepared according to the going concern principle and are based on historical cost unless otherwise stated.

Principles of Consolidation

Subsidiaries are consolidated using the acquisition method from the date when control is obtained. The group has control when it is exposed to variable returns and can influence these through its power.

Gross accounting is applied consistently for the accounting of assets and liabilities, except in cases where both a receivable and a liability exist against the same counterparty and these are legally offsettable and the intention is to do so. Gross accounting is also applied for revenues and expenses unless otherwise stated.

Classification of Assets and Liabilities

Non-current assets, long-term liabilities and provisions are expected to be recovered or fall due for payment later than twelve months after the balance sheet date. Current assets and short-term liabilities are expected to be recovered or fall due for payment within less than twelve months after the balance sheet date

Conversion of foreign currency

The Group's reporting currency is SEK. Subsidiaries have SEK and EUR as functional currency, respectively.

Transactions in foreign currency are converted to functional currency at the transaction date exchange rate. Monetary items are converted at the balance sheet date exchange rate and exchange rate differences are recognized in the income statement as other operating expenses or other operating income.

Tangible and Intangible Assets

Tangible Assets

Reported at acquisition value with deductions for depreciation and write-downs. Depreciation occurs linearly over the estimated useful life (inventories, tools, and installations 3-10 years).

Profit or loss is reported in the income statement for the reporting period in which the asset is disposed of, such as other expenses or other income.

Intangible Assets

Capitalized development expenses mainly relate to the Group's software platform. Capitalization occurs when the criteria in IAS 38 are met. Amortization occurs linearly over 5 years from the date the asset is put into use.

Goodwill is valued at acquisition value minus any accumulated write-downs. The factors that make up reported goodwill are mainly various forms of synergies, personnel, know-how, customer contacts of strategic importance, and market-leading positions in selected markets. Goodwill has an indefinite useful life and is tested for impairment at least annually.

Inventory

Inventory is valued at the lower of acquisition cost according to FIFO method (first in, first out) and net selling value.

Impairment assessment is made on an ongoing basis based on historical sales and inventory structure, divided into design rugs and unique rugs.

Products expected to be returned are reported as return assets.

Income Taxes

Current tax and deferred tax are reported according to IAS 12. Deferred tax is calculated on temporary differences between reported and tax values.

Financial instruments

A financial asset or a financial liability is recognised in the statement of financial position when Rugvista becomes a party to the contractual provisions of the instrument. Receivables are recognised when a customer has chosen to use a payment intermediary and the Company’s right to consideration is unconditional. See also the section on revenue recognition. A liability is recognised when the counterparty has performed and a contractual obligation to pay exists, even if an invoice has not yet been received. Accounts payable are recognised when an invoice is received.

Financial Assets

Financial assets consist of accounts receivable, other receivables and cash and cash equivalents. These assets are measured at amortised cost and are recognised net of loss allowances. Changes in loss allowances are recognised in the income statement. Financial assets measured at amortised cost are initially recognised at fair value plus transaction costs. Other receivables are initially recognised at the invoiced amount. Subsequent to initial recognition, the assets are measured using the effective interest method. The Group does not hold any financial assets classified as debt instruments measured at fair value through other comprehensive income or at fair value through profit or loss.

Impairment of Financial Assets

The Group's financial assets are subject to impairment for expected credit losses. Impairment for credit losses under IFRS 9 is forward-looking and a loss reserve is made when there is an exposure to credit risk. Expected credit losses reflect the present value of all shortfalls in cash flows due to defaults, either for the next 12 months or for the expected remaining term of the financial instrument, depending on the asset class and on credit deterioration since initial recognition. See also note 15.

Financial Liabilities

Financial liabilities are measured at amortised cost. Financial liabilities measured at amortised cost are initially recognised at fair value including transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. The Group’s financial liabilities comprise accounts payable, other current liabilities and accrued expenses, which are measured at amortised cost.

Allowances to employees

The Group has defined-contribution pension plans. The cost is reported in the period it relates to.

Lease agreement

Recognition exemptions                                                     

The Group has elected not to apply the recognition exemptions for short-term leases and leases of low-value assets, and not to separate non-lease components.            

The Group as lessee

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Right-of-use assets

The Group recognises right-of-use assets in the statement of financial position at the commencement date of the lease (i.e. the date on which the underlying asset is available for use). Right-of-use assets are measured at cost less accumulated depreciation and any impairment losses, and adjusted for any remeasurements of the lease liability. The cost of right-of-use assets includes the initial measurement of the related lease liability, any initial direct costs, and any lease payments made at or before the commencement date, less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the underlying asset at the end of the lease term, the right-of-use asset is depreciated on a straight-line basis over the lease term. The Group’s lease portfolio consists of leases of premises, forklifts and vehicles. Premises are depreciated in accordance with the applicable lease agreements over a period of 3–9 years. Vehicles and forklifts are depreciated in accordance with the applicable lease agreements over a period of 3–5 years.

Lease liabilities

At the commencement date of a lease, the Group recognises a lease liability measured at the present value of the lease payments to be made over the lease term. The lease term comprises the non-cancellable period together with periods covered by options to extend or terminate the lease, where the Group is reasonably certain to exercise those options. Lease payments include fixed payments (less any lease incentives receivable), variable lease payments that depend on an index or a rate, and amounts expected to be payable under residual value guarantees. Variable lease payments that do not depend on an index or a rate are recognised as other external expenses in the period in which they are incurred.

For the calculation of the present value of lease payments, the group uses the implicit interest rate in the agreement if it can be readily determined, and in other cases, the group's marginal borrowing rate at the inception of the lease agreement is used.

Revenue

The Group operates an e-commerce business selling rugs through its own websites to both consumers and businesses. Revenue is recognised in accordance with IFRS 15 when control of the goods transfers to the customer, which typically occurs upon delivery in accordance with the applicable delivery terms.

Payments are made via card, bank transfer or payment service providers. Fees to payment service providers are recognised as selling expenses.

The Group offers a 30-day right of return. The transaction price is reduced for expected returns and recognised as a refund liability. A right-of-return asset is recognised for the right to recover the goods. The estimate is based on historical return data (12-month average).

The Company applies the practical expedient in IFRS 15.121, which means that information about remaining performance obligations is not disclosed for contracts with an original expected duration of one year or less. With reference to this practical expedient, the refund liability is not presented separately.

New and amended standards

No new or amended IFRS standards effective for 2025 have had a material impact on the financial statements.

Other IFRS Accounting Standards that become effective on 1 January 2026 or later are not expected to have a material impact on the financial statements, with the exception of IFRS 18 Presentation and Disclosure in Financial Statements, which was issued on 16 February 2026. Rugvista will apply the new standard from its mandatory effective date of 1 January 2027.

No new or amended IFRS Accounting Standards have been early adopted.

Significant estimates and judgments

Impairment testing of goodwill

In performing impairment testing of goodwill, a number of significant assumptions and judgements are required in order to determine the value in use of the cash-generating unit. These assumptions and judgements relate to expected future discounted cash flows. Forecasts of future cash flows are based on management’s best estimates of future revenue and operating expenses, taking into account historical performance, general market conditions, industry developments and forecasts, and other available information. The assumptions are prepared by management and reviewed by the Board of Directors.

For more information on the impairment testing of goodwill, see note 11 Goodwill.

Valuation of inventory and obsolescence

Inventories are measured at the lower of cost and net realisable value, where cost is determined using the FIFO method (first in, first out). Net realisable value is defined as the estimated selling price less costs to sell. Adjustments to net realisable value include assessments of inventory obsolescence.

Provision for returns

A right-of-return asset is recognised for the right to recover products from customers. Historical data is used as a basis for estimating return rates at the time of sale. The provision for returns is measured to ensure that there is no material risk of reversal of recognised revenue in subsequent reporting periods, based on an average of actual returns over the 12 months preceding the reporting period.