Page 37 - Sector Alarm Annual Report 2020

Sector Alarm / Annual Report 2020
2.3 Foreign currency translation
Functional currency and presentation currency
Transactions in foreign currencies are translated into the respective functional currencies of the respective Group companies. The consolidated financial statements are presented in NOK, which is both the functional currency and the presentation currency of the parent company.
Transactions and balance sheet items
Transactions in foreign currency are translated into the functional currency using the exchange rates at the dates of the transactions. Currency gains and losses from translating monetary items (assets and liabilities) in foreign currency, are recognised in the consolidated income statement using the exchange rates at the reporting date.
Translation differences related to working capital are presented as other gains and losses. Translation differences related to loans are presented as a financial item.
Group companies
Income statements and balance sheets for Group entities (none with hyperinflation) with operational currencies that differ from the presentation currency are translated as follows:
a. the balance sheet is translated at the final exchange rate on the balance sheet date
b. the income statement is translated at the average exchange rate (if the average does not provide a reasonable estimate of the
accumulated effects of using the transaction exchange rate, the transaction exchange rate is used)
c. translation differences are recognized in other comprehensive income and appear in the item currency translation differences.
On consolidation, the difference between translation of net investment in foreign companies is recognized in other comprehensive income (OCI) as a separate item in equity. When selling parts of foreign companies, the translation difference recognized in other comprehensive income is recognized in the profit and loss as a part of the gain or loss on the sale.
Assets and liabilities arising from business combinations are regarded as assets and liabilities in the acquired unit and are translated at the exchange rate on the balance sheet date.
2.4 Property, plant and equipment
Property, plant and equipment are recognised at cost, less any accumulated depreciation or impairment losses. The costs include costs that are directly associated with the acquisition of the asset. Subsequent expenditures are added to the asset’s carrying amount or are recognised separately in the balance sheet when it is probable that future financial benefits from the expense will flow to the Group and the expense can be measured reliably. The carrying amount of replaced parts are recognised on the income statement. Other repair and maintenance costs are recognized in the income statement during the period in which the expenses are incurred.
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss.
The useful lifetime of the assets, and their residual value, is assessed on each balance sheet date and are amended if necessary. When the carrying amount of an asset is higher than the estimated recoverable amount, the value is written down to the recoverable amount. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
2.5 Intangible assets
Goodwill
Goodwill arising from the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
Licenses
Licenses that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.