Share 2017-11-24 17:29 RATOS B 36.50 SEK

Accounting principles and Alternative performance measures

From Ratos interim report January-September 2017

Ratos’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and associated interpretations (IFRIC), as endorsed by the EU. This interim report was prepared in accordance with IAS 34, Interim Financial Reporting, and applicable provisions in the Swedish Annual Accounts Act. The parent company also applies RFR 2 Accounting for Legal Entities.

Reporting and measurement principles are unchanged compared with those applied in Ratos’s 2016 Annual Report. The following change has been made to the presentation format.

Amended presentation form for the consolidated statement of cash flows
To more clearly separate cash flows arising in operations conducted and the cash flows that relate to the financing of such operations, interest paid and interest received, which were previously included in operating activities, have been moved to financing activities (interest paid) and investing activities (interest received).

Consequently, cash flow is based on operating profit instead of profit before tax, which was used in the past.

IFRS 15 Revenue from Contracts with Customers
IFRS 15 will be applied from 2018 and addresses the recognition of revenue from contracts with customers and the sale of certain non-financial assets. The standard will replace IAS 11 Construction Contracts and IAS 18 Revenue and their related interpretations. Since Ratos’s subsidiaries operate in a variety of sectors, they will be affected to different degrees by the new rules. In 2016, Ratos’s companies commenced a review of their respective types of revenue and analysed whether the new rules in IFRS 15 will affect revenue recognition when the standard takes effect. This work has continued in 2017 and in-depth analyses have been conducted in a few companies. The previous preliminary conclusion, that the transition to IFRS 15 would not have any significant effects on the Ratos Group’s financial earnings and position, has been strengthened. The ongoing work is mainly focused on presentation and disclosure issues, and implementation.

Alternative performance measures
To facilitate a comparison between periods and enable follow-up of the ongoing earnings and performance of the company portfolio, Ratos presents certain financial information that is not defined in accordance with IFRS. For a reconciliation of the alternative performance measures used in Ratos's financial reports with the most directly reconcilable IFRS-measures, please see the link below.

Alternative performance measures