Note G1 Summary of important accounting principles
Asset acquisitions or business combinations Acquisitions of companies can be classified as either business combinations or asset acquisitions in accordance with IFRS 3. It is an individual assessment that is made for each separate acquisition. Corporate acquisitions, whose primary purpose is to acquire a company's assets and where the company's possible management organisation and administration are of secondary importance to the acquisition, are classified as asset acquisitions. Other acquisitions are classified as business combinations. Asset acquisitions For acquisitions of subsidiaries considered asset acquisitions, the acquisition cost is allocated to individual assets and liabilities, based on their fair values at the time of acquisition. In the case of asset acquisitions, no deferred tax is attributable to the acquisition. Business combinations The difference between the acquisition value of business combinations and the acquired share of the net assets in the acquired business is classified as goodwill and is recognised as an intangible asset in the balance sheet. Goodwill is measured at cost minus accumulated impairment losses. Transaction costs are expensed directly under profit for the period. Business combinations are reported in accordance with the acquisition method. The purchase price consists of the fair value of transferred assets, liabilities that the Group takes on to previous owners of the acquired company, and shares issued. The purchase price also includes the fair value of all assets or liabilities that result from agreed conditional purchase considerations. The fair value of the agreement regarding conditional purchase considerations is based on management's assessment of what is likely to be paid, given the terms of the share transfer agreement.
Hemnet Group AB (publ) (“the Parent Company”) and its subsidiaries (collectively “the Group”) shall be the marketplace for residential property and related services that is the most appreciated and visited by estate agents, site visitors and advertisers. The parent company is a limited liability company registered in Sweden and based in Stockholm. The address for the head office is Klarabergsgatan 60, 111 21 Stockholm. On March 15, 2022, the Board of Directors approved this annual report and consolidated statements for publication. The consolidated income statement and consolidated statement of financial position and the parent company's income statement and balance sheet will be subject to adoption at the Annual General Meeting (AGM) on April 29, 2022. The Group uses the calendar year (1 January - 31 December) as its fiscal year. In a multi-year overview, figures from 2017 are the year in which the Group was formed, as well as the parent company's first extended fiscal year. The parent company was formed on Dec. 2, 2016 and thus had an extended first fiscal year in 2017: 2 December 2016 - 31 December 2017, while the Group was formed on 9 January 2017. Unless otherwise stated, all amounts are reported in millions of SEK (MSEK). Rounding is done to the nearest million. This note contains a list of material accounting principles that were applied when the consolidated financial statements were prepared, to the extent that they have not already been indicated in previous notes. Unless otherwise specified, these principles have been applied consistently for all years presented. The consolidated financial statements include the legal Parent Company Hemnet Group AB (publ) and its subsidiaries.
G1 G2 G3 G4 G5 G6 G7 G8 G9
G10 G11 G12 G13 G14 G15 G16 G17 G18 G19 G20 G21 G22 G23 G24 G25 G26 G27 G28 G29
In business combinations, full deferred tax is based on the temporary differences between the asset's fair value and their book value.
Transactions within the Group, balance sheet items and unrealised gains and losses on transactions between group companies are eliminated. Accounting principles for subsidiaries have been changed, where appropriate, to ensure consistent application of the Group's principles. Segment reporting The operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, for Hemnet, the Group CEO. The chief operating decision-maker is the function responsible for the allocation of resources and for assessing the performance of the operating segment. The Group has identified one operating segment, which is the Group as a whole. The assessment is based on the fact that the Group is followed up as a whole. It is not applicable with some form of geographical breakdown or division of business/product category, etc. Financial reporting is based on a Group-wide organizational and management structure. The various units in the Group have the local currency as the functional currency, as the local currency has been defined as the currency used in the primary financial environment in which each unit is mainly operating. In the consolidated financial statement, Swedish krona (SEK) is used, which is the parent company's functional currency and the Group's reporting currency. All companies in the Group have Swedish krona (SEK) as the functional currency. Transactions and balance sheet items Foreign currency transactions are converted into the functional currency at the exchange rates prevailing on the transaction date or the date the items are revalued. Exchange rate gains and losses arising from the payment of such transactions and when converting monetary assets and liabilities in foreign currency at the closing date are reported under comprehensive income. Conversions of foreign currency Functional currency and reporting currency Exchange rate gains and losses related to loans and cash and cash equivalents are reported under comprehensive income as financial income or expenses. Revenue recognition The Group’s net sales are generated from sales of services, mainly property listings and advertising services. Revenues are reported in accordance with IFRS 15, where a principle-based five-stepmodel is applied to identify agreements and any separate
For the Parent Company's accounting principles, see Note P1.
Basis for the preparation of the reports The consolidated statement for the Group has been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations from the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the EU, RFR 1 Supplementary Accounting Rules for Groups and the Swedish Annual Accounts Act. The financial statement has been prepared in accordance with historical cost approach, except regarding the revaluation of financial assets measured at fair value through profit or loss and financial liabilities (including derivatives) valued at fair value through profit or loss. Preparing reports in accordance with IFRS requires the use of several important estimates for accounting purposes. Furthermore, management is required to make certain judgement calls when applying the Group's accounting principles. Those areas that require a high degree of judgement, which are complex or such areas where assumptions and estimates are of material importance to the financial statement, are specified in Note G2.
P1 P2 P3 P4 P5 P6 P7 P8 P9
For the Parent Company's accounting principles, see Note P1.
New standards, changes and interpretations applied by the Group No new applications of standards, changes or interpretations that have a material impact on the Group have been added since the last annual report 2020.
No other IFRS or IFRIC interpretations that have not yet taken effect are expected to have a material impact on the Group.
Consolidated financial statements The consolidated income statement and balance sheet include all companies in which the parent company directly or indirectly holds more than half of the voting rights of the shares and companies in which the Group otherwise has a controlling influence. The Group controls a company when it is exposed to or is entitled to a variable return from its holding in the company and has the opportunity to impact the return through its influence in the company. Subsidiaries are included in the consolidated financial statements from the date the controlling influence is transferred to the Group. They are excluded from the consolidated financial statements from the date on which the controlling influence ceases.
46 · HEMNET GROUP | ANNUAL AND SUSTAINABILITY REPORT 2021
Financial statements
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