Page 76 - Loomis Annual Report 2017

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Notes – Group
Loomis Annual Report 2017
Note 2 cont.
requirement for the transferred asset. All subsidiaries report to the Group in accordance with the Group’s accounting principles.
Group companies are all companies owned or controlled by Loomis AB, according to the de nition provided under the scope of the consolidated nancial statements above.
Revenue recognition (IAS 18)
Revenue comprises the fair value of the amount received, or the amount expected to be received, for services sold in the Group’s operations. Revenue is reported exclusive of value- added tax and discounts and after elimination of intra-Group sales. The Group recognizes revenue when the amount of reve- nue can be measured in a reliable manner and when it is likely that future economic bene ts will accrue to the Group.
The Group’s revenue is generated from Cash in Transit,
Cash Management Services and International valuables logistics comprising cross-border transportation of cash and precious metals and storage of valuables. Revenue is recog- nized in the period in which it is earned, on a straight-line basis over the contract period, and when the Group assesses that the criteria for revenue recognition have been met. Subscription revenue is allocated on a straight line basis over the period to which the subscription is in effect.
As part of the services offered in Segment International involve so-called pass-through transactions. Pass-through trans- actions are transactions executed on behalf of a customer
or other third party which are common in international logis-
tics solutions. The consignee has to pay import taxes (VAT and duties) for the imported goods. Orders from Loomis’ foreign customers usually include obtaining customs clearance and the declaration of custom duties and other applicable taxes. Loomis executes these transactions on behalf of the customers but the transactions do not generate any economic bene ts for Loomis. The payment of import taxes by Loomis on behalf of customers is therefore regarded as a pass-through transaction. Custom duties and other applicable taxes as well as charges passed
on to the customers are therefore accounted for in the balance sheet only and do not affect the statement of income. If a mark- up is charged to the customer for handling of custom duties and import taxes, this fee is recognized as revenue.
Other revenue earned is recognized according to the following:
Interest income is reported in the statement of income in the period to which it is attributable, according to the effective interest method.
Dividends received are reported in the statement of income when the right to receive the dividend has been established.
Items affecting comparability
Items affecting comparability include events and transactions, whose effects on earnings require attention when the result for the period is compared with previous periods, such as: Capital gains and losses arising from the divestment of signif-
icant cash-generating units
Signi cant impairment losses
Other signi cant items affecting comparability.
Capital gains and capital losses from divestment of signi cant cash-generating units, signi cant impairment losses or other sig- ni cant items affecting comparability, which are reported as items affecting comparability in a certain period, are consistently rec- ognized in future periods. This is done by any reversals of cap- ital gains and capital losses from divestment of signi cant cash generating units, signi cant impairment losses or other signi cant items affecting comparability also being recognized under the heading “Items affecting comparability.” Items affecting compa- rability are reported by function in Note 10.
* Argentina and Chile are included in the European segment because the operations there are reported and followed up as part of the European segment.
Segment reporting (IFRS 8)
Operating segments are reported in accordance with the inter- nal Loomis reporting, submitted to the CEO who has been iden- ti ed as the most senior executive decision maker within Loo- mis. As a consequence of the acquisition of VIA MAT, Loomis have the following segments as of the second quarter 2014: Europe*, USA, International and Other. The segment presidents of Europe, USA and International are responsible for follow-
ing up the segments’ operating income before amortization of acquisition-related intangible assets, acquisition-related costs and revenue and items affecting comparability (EBITA), accord- ing to the manner in which Loomis reports its consolidated statement of income. This then forms the basis for how the CEO monitors the development and allocates resources etc. Loomis has therefore chosen this structure for its segment reporting.
National cash handling services (Cash in Transit and Cash Management Services) are split between the segments Europe and USA. The split is based on the similarities between Euro- pean countries in important areas relating to, for example, mar- ket conditions, political circumstances, laws and regulations that affect Loomis’ operations. Operations in the USA are affected
to a signi cant degree by other market conditions and politi-
cal circumstances, as well as by laws and regulations relevant to Loomis’ operations, even if the services provided can be consid- ered similar to those provided in Segment Europe. The aggrega- tion in Europe is consistent with IFRS 8.12. The purpose of this standard is to provide information that makes it possible to under- stand and evaluate the environment in which Loomis operates.
International valuables logistics is not included in the operat- ing segments Europe or the USA based on a geographical split, but is instead reported as a separate segment, International. This is because segment International differs from the other segments as it includes cross-border transportation of cash and precious metals and storage of valuables and, up until June 30, 2016 gen- eral cargo operations. The CEO separately monitors the seg- ments’ nancial performance and allocates resources.
The segment ‘Other’ consists of the head of ce and the Par- ent Company, the risk management function and other functions managed at Group level and which are related to the Group as a whole.
Government grants and assistance (IAS 20)
Similar to other employers, Loomis is eligible for a variety of government grants relating to employees. These grants are for training, incentives for the hiring of new personnel, reduction of working hours, etc. All grants are reported in the statement of income as a cost reduction in the same period in which the related underlying cost is reported.
Income taxes (IAS 12)
Income taxes include current and deferred taxes. Income tax is recognized in income for the year unless the underlying trans- action is reported in other comprehensive income, in which case the corresponding tax is reported according to the same principle.
Current tax is measured based on the tax rules that apply in the countries where the Parent Company and subsidiaries are operating.
Deferred tax is measured applying the tax rates and tax laws that have been enacted or announced as of the balance sheet date, and that are expected to apply when the deferred tax asset in question is realized or the deferred tax liability is settled.
Deferred tax is recognized using the balance sheet method. Deferred tax is measured based on the differences between the carrying amount reported in the balance sheet and the tax base – so called temporary differences.
Deferred tax assets are recognized when it is probable
that the amounts can be used against future taxable income. Deferred tax assets are measured on the balance sheet date and any past deferred tax assets that have not been measured