Notes for P&L

Applied accounting policies

The parent company’s financial statements have been prepared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board. This means that International Financial Reporting Standards (IFRS), as adopted by the EU, are applied to the extent possible, subject to the exemptions and additions set out in RFR 2.

Basis for preparation of the annual report

The preparation of financial statements in accordance with IFRS requires management to make estimates and judgements for accounting purposes. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed under Significant accounting estimates and judgements.

These judgements and assumptions are based on historical experience and other factors considered reasonable under the prevailing circumstances. Actual results may differ from these estimates if assumptions change or other conditions arise.

Shares in subsidiaries

Shares in subsidiaries are accounted for in the parent company at acquisition value with deductions for any write-downs. If the reported value of the shares exceeds their true value, a write-down of the value to the true value is made. An impairment test is prepared when there is an indication of a decline in value. The write-down is reported in the income statement. In cases where the write-down is no longer required, the write-down is reversed through the income statement.

Financial instruments

The parent company does not apply IFRS 9 in full in the legal entity, in accordance with RFR 2. Financial instruments are measured at historical cost in accordance with the Swedish Annual Accounts Act.

Financial non-current assets are recognised at cost less any impairment losses for permanent declines in value. Financial current assets are measured at the lower of cost and net realisable value.

Impairment of financial assets classified as debt instruments is performed in accordance with the expected credit loss model under IFRS 9.

Accounting for group contributions

Group contributions received and paid are recognised as appropriations.

Revenue

The parent company’s revenue consists of management fees relating to administrative and group-wide services provided to Rugvista AB. The consideration is based on costs incurred plus a fixed margin in accordance with the agreements entered into.

The services constitute a performance obligation satisfied over time, as Rugvista AB simultaneously receives and consumes the benefits of the services as they are provided. Accordingly, revenue is recognised over time in the period in which the services are rendered.

Significant accounting estimates and judgements

The preparation of the financial statements in accordance with the applicable parts of International Financial Reporting Standards (IFRS), as adopted by the EU, and with the exemptions and additions set out in RFR 2, requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the recognised amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Shares in Subsidiaries

The assessment of whether shares in subsidiaries are in need of impairment involves significant judgments from management. When testing the recoverable amount, assumptions are made about the subsidiaries' future cash flows, growth rates, and discount rates.

These assumptions are based on forecasts approved by management and assessments of future market developments. Actual outcomes may differ from these assumptions, which could result in the need to recognise an impairment loss.