Page 36 - Sector Alarm Annual Report 2020

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Notes
Amounts in TNOK
Note 1 / General information
Sector Alarm Holding AS (the Company) and its subsidiaries (the Group) provide professionally monitored alarms for residential households and small businesses in Europe. The Group operates in Norway, Sweden, Ireland, Finland, Spain and France. Sector Alarm Holding AS is the parent company of the Group and provides centralized services and corporate governance on behalf of the Group. The principal activities of the Company and its subsidiaries are described in note 5 Revenue.
The registered headquarter of Sector Alarm Holding AS is located at Vitaminveien 1A, Oslo in Norway.
These consolidated financial statements were approved by the Board of Directors on 22 April 2021 for adoption by the Annual General Meeting on 22 April 2021.
Note 2 / Significant accounting principles
The following section describes the significant accounting principles applied when preparing these consolidated financial statements. These
principles are consistently applied for all periods presented, unless otherwise stated.
2.1 Framework for presentation of the financial statement
The consolidated financial statements for 2020 has been prepared according to International Financial Reporting Standards (IFRS) as adopted by The European Union (EU).
The consolidated financial statements are based on a historical cost principle, except for derivatives measured at fair value through profit or loss.
Preparation of financial statements in accordance with IFRS requires use of estimates. Furthermore, the application of the company’s accounting principles requires management to exercise judgements. Significant estimates and judgements, are described in note 4.
2.2 Consolidation principles
Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
Business combinations are accounted for using the acquisition method when control is transferred to the Group. The consideration transferred is measured at fair value, as are the identifiable net assets acquired. Included in the consideration is also the fair value of all assets or liabilities arising from an agreement of contingent consideration. Expenses related to the business combination are expensed as incurred. Any non-controlling interests are measured at their proportionate share of the acquired entity’s net identifiable assets at the date of acquisition.
If the sum of the consideration, the carrying amount of non-controlling interests and the fair value at the acquisition date of previous ownership interests exceeds the fair value of net identifiable assets in the acquired company, the difference is recognized in the balance sheet as goodwill, cf. note 2.5. If the sum is lower than the company’s net assets, the difference is recognized immediately in the consolidated income statement.
Intra-group transactions, balances and unrealized profits and losses between group companies are eliminated. The financial statements of the subsidiaries are restated when necessary to achieve compliance with the Group’s accounting principles.