Saab 2013 Annual Report Download - page 74

NOTE 1 Accounting Principles
Operations
Saab  is a Swedish limited company with its registered address in
Linköping. e company’s shares are listed on the   Stockholm’s
large cap list. e operations of Saab  with its subsidiaries, joint ventures
and associated companies (jointly referred to as Saab or the Group) are
divided into six business areas: Aeronautics, Dynamics, Electronic Defence
Systems, Security and Defence Solutions, Support and Services, and
Co mbitech. e operations in each business area are described in Note .
Saab has a strong position in Sweden and the large part of its sales are
generated in Europe, in addition to which Saab has a local presence in South
Africa, Australia, the US and other selected countries.
On  February , the Board of Directors and the President approved
this annual report and consolidated accounts for publication, and they will be
presented to the Annual General Meeting on  April  for adoption.
Conformity to standards and laws
e consolidated accounts have been prepared in accordance with the Interna-
tional Financial Reporting Standards () issued by the International Account-
ing Standards Board () and the interpretations of the International Financial
Reporting Interpretations Committee () as approved by the . e consol-
idated accounts have also been prepared in accordance with the Swedish Finan-
cial Reporting Board’s recommendation   Supplementary Accounting Rules
for Groups, which contains certain additional disclosure requirements for Swed-
ish consolidated accounts prepared in accordance with .
e annual report for Saab  has been prepared according to the Annual
Accounts Act, the Swedish Financial Reporting Board’s recommendation  
Reporting by Legal Entities and the pronouncements of the Swedish Finan-
cial Reporting Board. Dierences between the accounting principles applied
by Saab  and the Group are the result of limitations on opportunities to
apply  by the Parent Company owing to the Annual Accounts Act, the
Act on Safeguarding Pension Commitments and in certain cases current tax
rules. Signicant dierences are described below under “Signicant dier-
ences between the Group’s and the Parent Company’s accounting principles.”
Assumptions in the preparation of the financial reports
e Parent Company’s functional currency is Swedish kronor (), which is
also the reporting currency for the Parent Company and for the Group. e
nancial reports are presented in . All amounts, unless indicated other-
wise, are rounded o to the nearest million.
Assets and liabilities are carried at historical cost, with the exception of
certain nancial assets and liabilities, investment properties and biological
assets, which are carried at fair value or amortised cost. Derivatives are car-
ried at fair value.
Non-current assets and disposal groups held for sale are carried at the
lower of their carrying amount and fair value less selling expenses at the time
they were classied as held for sale.
e preparation of the nancial reports in accordance with  requires
the Board of Directors and Management to make estimates and assumptions
that aect the application of the accounting principles and the carrying
amounts of assets, liabilities, revenue and expenses. Estimates and assump-
tions are based on historical experience and knowledge of the industry that
Saab operates in, and under current circumstances seem reasonable. e
result of these estimates and assumptions is then used to determine the carry-
ing amounts of assets and liabilities that otherwise are not clearly indicated
by other sources. Actual outcomes may deviate from these estimates and
assumptions.
Estimates and assumptions are reviewed regularly, and the eect of
changed estimates is recognised in prot or loss.
Estimates made by the Board of Directors and Management in applying
the accounting principles in compliance with  that may have a signicant
impact on the nancial reports as well as estimates that may necessitate
signicant adjustments in nancial reports in subsequent years are described
in more detail in Note .
e accounting principles described below for the Group have been
applied consistently for all periods presented in the Group’s nancial reports,
unless otherwise indicated below.
Application of new and revised accounting rules
 and  have issued and the  has adopted the following new and
revised standards, which apply as of the scal year :
   “Presentation of nancial statements”. Changes related to other
comprehensive income with regard to what items can and cannot be
reversed in the income statement.
   “Employee benets”. Changes relate to the treatment of actuar-
ial gains and losses: Expected return on assets under management
(calculated using the same interest rate as that used for discounting
pension liabilities) and the cost of past services are recognised imme-
diately.
   “Financial instruments: Disclosures”. Disclosures related to net
accounting of assets and liabilities.
   “Fair value measurement”. Simplications of the measurement
of fair value.
Eects of amendments to IAS  were reported in the  annual report and
in Note  of this Annual Report. Other new and amended standards and
interpretations have not had any signicant eect on the Group’s nancial
reports for .
New and amended standards and interpretations that have not yet
entered into force
 has issued the following new and amended standards that have not yet
entered into force and  has published the following new and amended
interpretations that have not yet entered into force:
Standards
Will apply to financial
years beginning:
Amendments to transitions rules for
 ,  and 
 January *
(adopted by )
  “Consolidated nancial statements”  January *
(adopted by )
  “Joint arrangements”  January *
(adopted by )
  “Disclosures of interests in other entities”  January *
(adopted by )
  (amended ) “Investments in Associ-
ates and Joint Ventures“
 January *
(adopted by )
  “Financial instruments: Presentation”.
Changes relate to net accounting of assets and
liabilities
 January 
(not adopted by )
Amendments to  ,  and  . For the
consolidation of investment entities
 January 
(adopted by )
  “Impairmen of assets”. Relates to recover-
able amount disclosures
 January 
(not adopted by )
  “Financial instruments: Recognition and
measurement”. Change relating to novation of
derivatives
 January 
(not adopted by )
  “Levies”  January 
(not adopted by )
* Earlier application permitted
Eects of amendments to IFRS 11 Joint arrangements
During  Saab had a joint arrangement to which the proportional method
was applied. is holding will be classied as a joint venture as of  and
will be reported in accordance with the equity method. If the standard had
been applied as of  December , the Group’s total assets would have been
 lower than reported in . e Group’s liquid assets would have
been  lower. See Note  for additional information.
Other standards and interpretations are not expected to have any material
eect on the Group’s nancial reports.
FINANCIAL INFORMATION > NOTES
70 SAAB ANNUAL REPORT 2013