AAK Annual Report 2020

AAK Annual Report 2020 68 AAK AB (publ.), corporate identity number 556669-2850, is a Swedish registered limited lia- bility company domiciled in Malmö, Sweden. The shares of the Parent are listed on NASDAQ OMX Stockholm, in the Large Cap list and under Consumer Goods. The head office is located at Skrivaregatan 9, 215 32 Malmö, Sweden. Basis of presentation of the annual report and consolidated 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 instruments, 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 critical 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 differ- ent assumptions or circumstances. 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, 2020. None of these have any significant effect on the Group’s financial statements. New standards and interpretations not yet applied by the Group A number of new standards and interpretations enter into force for financial years that start after January 1, 2020 and have not been applied by the Group in this financial report. These standards are not expected to have any significant effect on the Group’s financial statements in the current or future reporting periods and on foreseeable future transactions. These consolidated financial statements for 2020 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 consolidated financial statements for publication on April 14, 2021. 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 com- pany 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 com- panies are to be recognized at fair value or according to the proportional share of the acquired company’s net assets. The excess of the purchase price, any non-controlling interests and the fair value of previous shareholdings at the acquisition date over the fair value of the Group’s interest in identifiable net assets is recognized as goodwill. If this amount is less than the fair value for the acquired subsidiary’s assets, the difference is recognized directly in the statement of comprehensive income. All intra-group transactions, balances and unrealized gains on transactions are eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Note 1 | General information Note 2 | Summary of significant accounting policies Amounts stated in SEK million unless specified otherwise. Notes