AAK Annual Report 2019

Notes Amounts stated in SEK million unless specified otherwise. AAK AB (publ.), corporate identity number 556669-2850, is a Swedish registered limited liability company domiciled in Malmö, Sweden. The shares of the Parent are listed on NASDAQ OMX Stockholm, in the Large Cap list and under Basis of presentation of the annual report and consoli- dated financial statements The Group’s consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standard Board (IASB) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as adopted within the EU, the Swedish Annual Accounts Act, and the Swedish Financial Reporting Board’s recommendation RFR 1 “Supplementary accounting rules for groups of companies”. The Parent company has prepared its financial statements in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2 “Accounting for legal entities”. The annual and consolidated financial statements have been prepared on a historical cost basis, with the exception of currency, fixed income and commodity derivative instru- ments, which are measured at fair value through profit or loss. Preparing these financial statements requires that the Board of Directors and the Company management use certain crit- ical accounting estimates and assumptions. These estimates and assumptions can materially affect the income statement, balance sheet and other information contained herein, including contingent liabilities; see Note 4. Actual outcome can vary from these estimates under different assumptions or circumstances. Consumer Goods. The head office is located at Skrivaregatan 9, 215 32 Malmö, Sweden. These consolidated financial statements for 2019 are for the Group consisting of the Parent and all subsidiaries. The Group also has ownership interests in associates and joint ventures. The Board of Directors approved these consoli- dated financial statements for publication on April 15, 2020. New and amended standards applied by the Group A number of new standards and interpretations enter into force for financial years that start after January 1, 2019. None of these will not have any significant effect on the Group’s financial statements. IFRS 16 Leases In January 2016, IASB published a new leasing standard that will replace IAS 17 Leases and the associated interpre- tations IFRIC 4, SIC-15 and SIC-27. The standard requires that assets and liabilities attributable to all leases, with some exceptions, be recognized in the balance sheet. This recognition is based on the view that the lessee has a right to use an asset during a specific period of time and also has an obligation to pay for this right. AAK applied the new standard as of January 1, 2019. The Group was affected primarily by lease agreements of rental for premises, land and lease of vehicles. The Group has applied the modified retrospective approach and has, in accordance with the standard, not restated the compar- atives for 2018. The Group has adopted the majority of the practical expedients allowed for the first time that IFRS 16 is applied, the most significant being to account for leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-term leases. The Group has also, after initial application, applied the practical expedients of accounting for leases with a lease term of 12 months or less and leases of low value as an expense on a straight-line basis in the income statement. On transition, the right-of-use assets were measured at an amount corresponding to the lease liabilities at December 31, 2018 and amounted to SEK 741 million. Equity was not affected in the transition to IFRS 16. For more information about leasing, see note 16. Consolidated financial statements Subsidiaries The consolidated financial statements cover AAK AB and all its subsidiaries. Subsidiaries are all companies over which the Group has a controlling influence. The Group controls a company when it is exposed to or is entitled to variable return from its holding in the company and is able to affect the return by exerting influence in the company. Subsidiaries are included in the consolidated financial statements as from the date on which the controlling influence is transferred to the Group. They are excluded from the consolidated financial statements as from the date on which the controlling influence ceases. Purchase method The acquisition of subsidiaries is recognized using the purchase method of accounting. The cost of acquisition is measured as the fair value of the assets provided as consideration, liabilities incurred and shares issued by the Group. Transaction costs relating to acquisitions are expensed as they are incurred. Identifiable assets acquired and liabilities and obligations assumed in an acquisition are measured initially at fair value at the acquisition date. For each acquisition, the Group determines whether all non-controlling interests in the acquired companies are to 68 1 2 Note General information Note Summary of significant accounting policies