N O TE 39 A ccounting principle s The Parent Compan y s fnancial s t atements are prepared in accor dance with the S w edish Annual Accounts Act and the S w edish f inancial R eportin g Boar d s s t andar d RFR 2 Accountin g for Le gal Entities The Parent Compan y thus follo ws the same accountin g principles as the Group when rele v ant and e x cept in the cases s t ated belo w The diferences that e xis t bet w een the Parent Compan y s and the Group s accountin g principles are a result of the res trictions that the S w edish Annual Accounts Act the S w edish Act on Safe guar din g of Pension Commitments and the options that R f R 2 allo w for IFRS in the Parent Compan y RFR 2 IFRS 3 Business combinations The Parent Compan y measures the acquisition cos t as the sum of the acqui sitiondate fair v alues of assets tr ansferred liabilities incurred and all cos ts that are directly at tribut able to the acquisition Contin g ent consider ations are recogniz ed as part of the acquisition cos t if it is probable that the y will be realiz ed The acquisition cos t is adjus ted in subsequent periods if the initial assessment needs to be re vised RFR 2 IAS 17 Leases A complete implement ation on le gal entit y le v el of accountin g for fnance leases is sometimes difcult to achie v e since specifc or dinances for the t axation based on such accountin g are not a v ailable or are not complete Finance leases can therefore on le gal entit y le v el be accounted for accor din g to the requirements for oper ational leases This limit ation lacks pr actical implications since the Parent Compan y has not entered into an y leasin g a greements that could be classifed as fnance leases RFR 2 IAS 18 R e v enue Anticipated dividend from a subsidiar y is recogniz ed as income in the Parent Compan y in accor dance with RFR 2 if the Parent Compan y has the e x clusiv e rig ht to decide the amount of the dividend from the subsidiar y The Parent Compan y mus t furthermore ensure that the dividend is in line with the sub sidiar y s dividend capacit y Extr a dividends are sometimes a complement to the anticipated dividend If so the y are accounted for on a cash basis RFR 2 IAS 19 Emplo y ee benefts Accountin g for defned beneft plans accor din g to the S w edish Act on Safe guar din g of Pension Commitments leads to diferences bet w een the accountin g in the Parent Compan y and the Group These diferences ha v e no material impact on the emplo y ee benefts relatin g to the emplo y ees of the Parent Compan y Pension solutions either fall within the fr amew ork of the ITP plan that is insured via Alect a which is described in note 31 or in all material aspects consis t of other defned contribution plans RFR 2 IAS 21 The efects of chan g es in foreign e x chan g e r ates Par a gr aph 32 in IAS 21 s t ates that e x chan g e diferences that form part of a reportin g entit y s net in v es tments in a foreign oper ation shall be recogniz ed via the s t atement of income in the separ ate fnancial s t atements of the reportin g entit y RFR 2 s t ates that such e x chan g e diferences ins tead should be recogniz ed directly in shareholder s equit y in accor dance with par a gr aph 14 d in chapter 4 of the S w edish Annual Accounts Act Securit as AB follo ws RFR 2 and recogniz es e x chan g e diferences that fulfll the criteria for net in v es tment hed g es that is for which set tlement is neither planned nor lik ely to occur in the foreseeable future via the tr anslation reser v e in equit y RFR 2 IAS 27 Consolidated and separ ate fnancial s t atements The Parent Compan y has chosen to early adopt the chan g e in RFR 2 IAS 27 related to Group contributions The Parent Compan y has adopted the alter nativ e rule which means that Group contributions from subsidiaries as w ell as Group contributions to subsidiaries are accounted for as appropriations in the s t atement of income The efect on the res t ated compar ativ e y ear 2011 is that group contribu tions net ha v e impacted tot al fnancial income and e xpenses with M SEK 3187 while tot al appropriations ha v e increased with M SEK 3187 There has been no impact on t ax es net income for the y ear or ret ained earnin g s The efect on the res t ated compar ativ e y ear 2010 is that group contribu tions net ha v e impacted tot al fnancial income and e xpenses with M SEK 4396 while tot al appropriations ha v e decreased with M SEK 4396 There has been no impact on t ax es net income for the y ear or ret ained earnin g s RFR 2 IAS 39 Financial ins truments R ecognition and measurement The Parent Compan y follo ws IAS 39 with the e x ception of fnancial guar an tees in relation to subsidiaries f or further information refer to the account in g principles adopted b y the Group for recognition and measurement of fnancial ins truments in note 2 Capit al contributions Shareholder s capit al contributions are accounted for as an increase of the balance sheet item shares in subsidiaries An assessment whether an y impairment writedo wn is required in shares in subsidiaries is subsequently made Securit as sharebased incentiv e scheme In addition to the Group s accountin g principles for sharebased pa yments IFRS 2 as described in note 2 Accountin g principles the follo win g has been applied in the Parent Compan y s fnancial s t atements The Parent Compan y has secured the deliv er y of shares accor din g to Securit as share based incentiv e scheme b y enterin g into a s w ap a greement with a thir d part y re gar din g purchase of shares T o the e xtent that shares accor din g to the s w ap a greement is subject to deliv er y to emplo y ees in other Group companies than the Parent Compan y a liabilit y to Group companies has been recor ded in the Parent Compan y s accounts This liabilit y is recor ded at the v alue of the commitment that Securit as AB has to the subsidiaries to deliv er shares that is the number of shares to be deliv ered accor din g to the s w ap a greement at the lates t share price for Securit as AB s series B share Social securit y e xpenses are calculated based on the mark et v alue of the shares that potentially will be allocated Fluctuations in the share price for these shares thus lead to chan g es in social securit y e xpenses that impact the Parent Compan y s and Group s income This is the only impact on the Parent Compan y s and Group s income due to fuctuations in the share price for the shares that potentially will be allocated This means that an y possible increase or decrease of the liabilit y to Group companies has not been accounted for in the Parent Compan y s income s t atement N ot es 123 Securit as Annual R eport 2012 Annual R eport Notes and comments to the Parent Compan y fnancial s t atements