ence arisin g because s t atements of income are tr anslated usin g a v er a g e r ates, while balance sheets are tr anslated usin g e x chan g e r ates pre v ailin g at each balance sheet date , is pos ted directly to other comprehensiv e income . Where loans ha v e been r aised to reduce the Group ’ s foreign e x chan g e / tr anslation e xposure in foreign net assets, and qualif y for the hed g e accountin g criteria, e x chan g e r ate diferences on such loans are recogniz ed tog ether with the e x chan g e r ate diferences arisin g from the tr anslation of foreign net assets in other comprehensiv e income . The accumulated tr anslation difer - ences are accounted for in tr anslation reser v e in equit y . When a foreign oper ation or part thereof is sold, such e x chan g e diferences are recogniz ed in the s t atement of income as part of the gain or loss on sale . G oodwill and fair v alue adjus tments arisin g on the acquisition of a foreign entit y are treated as assets and liabilities of the foreign entit y and tr anslated usin g e x chan g e r ates pre v ailin g at each balance sheet date . T r ansactions, receiv ables and liabilities in foreign currenc y (IAS 21) T r ansactions in foreign currenc y are tr anslated into the functional currenc y in accor dance with the e x chan g e r ates pre v ailin g at the date of the tr ansac - tion. Ex chan g e diferences on monet ar y items are recogniz ed in the s t ate - ment of income when the y arise , with the e x ception of net in v es tment hed g es recogniz ed via other comprehensiv e income (see abo v e under the section T r anslation of foreign subsidiaries). Ex chan g e diferences from oper atin g items are recogniz ed as either production e xpenses or sellin g and adminis tr ativ e e xpenses, while e x chan g e diferences from fnancial items are recogniz ed as fnancial income or fnancial e xpenses. When preparin g the fnancial s t atements of individual companies, foreign currenc y denominated receiv ables and liabilities are tr anslated to the functional currenc y of the individual compan y usin g the e x chan g e r ates pre v ailin g at each balance sheet date . R e v enue recognition (IAS 11 and IAS 18) The Group ’ s re v enue is g ener ated mainly from v arious t ypes of securit y ser - vices. There is also re v enue from the sale of alarm products and, to a limited e xtent , cash handlin g ser vices. R e v enue from ser vices is recogniz ed in the period in which it is earned. Alarm ins t allations are recogniz ed in re v enue as the y are completed, in accor dance with the percent a g e of completion method. Accor din g to this method, re v enue , e xpenses, and thus, income are recogniz ed in the period in which the w ork w as undert ak en. The deter - mination of the percent a g e of alarm ins t allations that can be recogniz ed as re v enue is based on the time spent in relation to the tot al es timated time . T r ademark fees from the former subsidiar y Securit as Direct AB, relatin g to the use of the Securit as tr ademark, are recogniz ed on an accrual basis in accor dance with the subs t ance of the a greement , and are based on the sales recogniz ed b y Securit as Direct AB. Interes t income is recogniz ed in the s t atement of income in the period to which it is at tribut able . Oper atin g se gments (IFRS 8) Oper atin g se gments are business activities that ma y earn re v enues or incur e xpenses, whose oper atin g results are re gularly re view ed b y the chief oper - atin g decision mak er , the President and CEO , and for which discrete fnan - cial information is a v ailable . Oper atin g se gments cons titutes the oper ational s tructure for g o v ernance , monitorin g and reportin g. A combination of fac - tor s has been used in or der to identif y the Group ’ s se gments. M os t impor - t ant is the char acteris tic s of the ser vices pro vided and the g eogr aphical split . F or information re gar din g the se gments oper ations, refer to note 9. Accor din g to the conditions in IFRS 8, cert ain of the Group ’ s oper atin g se gments ha v e been a g gre gated in the fnancial reportin g. The Group ’ s oper ations are consequently divided into four report able se gments: · Securit y Ser vices North America, · Securit y Ser vices Europe (for 2011 and 2010 consis ted of an a g gre gation of the t w o oper atin g se gments Securit y Ser vices Europe and A viation), · M obile and M onitorin g (consis tin g of an a g gre gation of the oper atin g se gment M obile and the oper atin g se gment M onitorin g ), · Securit y Ser vices Ibero- America and · Other (consis tin g of an a g gre gation of all other oper atin g se gments). These se gments are also referred to as business se gments in the Group ’ s fnancial reports. As of 2013, the Securit y Ser vices Europe and M obile and m onitorin g business se gments will be mer g ed into one business se gment named Securit y Ser vices Europe . The Group ’ s oper ations will then be divided into three report able se gments and Other (consis tin g of an a g gre - gation of all other oper atin g se gments). Other includes all other oper atin g se gments as w ell as g ener al adminis - tr ativ e e xpenses, e xpenses for head ofces and other centr al e xpenses. All other oper atin g se gments comprise the guar din g oper ations in the M i d d l e Eas t , Asia and Africa as w ell as oper ations within securit y c o n s u l t i n g that report directly to the chief oper atin g decision mak er . U ntil October 21, 2011, Other also includes the Group ’ s joint v enture Securit as Direct S . A . (S witz erland), which has been div es ted as of this date . The assets and liabilities of each se gment include only those items that ha v e been utiliz ed or arisen in on g oin g oper ations. Non-oper ational balance sheet items, primarily current t ax, deferred t ax, and pro visions for t ax es, are accounted for under the Other headin g in the t able Capit al emplo y ed and fnancin g in note 9. In the t able Assets and liabilities in the same note , these items are accounted for as unallocated non-interes t bearin g assets and unallocated non-interes t bearin g liabilities. A reconciliation bet w een tot al se gments and the Group is disclosed in note 9. G eogr aphical information related to sales and non-current assets is disclosed in note 9 for S w eden (which is Securit as ’ countr y of domicile) and for all individual countries where the sales or non-current assets e x ceed 10 percent of the tot al amount for the Group . The g eogr aphical split of sales is based on the location of the sales. The location of the sales corresponds in all material aspects to the location of the cus tomer s. There are no sales to an y individual cus tomer that are deemed to represent a signifcant portion of the Group ’ s tot al sales. Accountin g for g o v ernment gr ants and disclosure of g o v ernment assis t ance (IAS 20) Securit as, lik e other emplo y er s, is elig ible for a v ariet y of gr ants relatin g to emplo y ees. These gr ants relate to tr ainin g, incentiv es for hirin g new s t af , reduction of w orkin g hour s, etc . All gr ants are accounted for in the s t ate - ment of income as a cos t reduction in the same period as the related under - lyin g cos t . T ax es (IAS 12) Deferred income t ax is pro vided in full, usin g the liabilit y method, on tempo - r ar y diferences arisin g bet w een the t ax bases of assets and liabilities and their carr yin g amounts in the consolidated fnancial s t atements. Ho w e v er , if the deferred income t ax arises from initial recognition of an asset or liabilit y in a tr ansaction other than a business combination that at the time of the tr ansaction afects neither accountin g nor t axable proft or loss, it is not accounted for . Deferred income t ax is determined usin g t ax r ates (and la ws) that ha v e been enacted or subs t antially enacted b y the balance sheet date and are e xpected to apply when the related deferred income t ax asset is realiz ed or the deferred income t ax liabilit y is set tled. A deferred t ax asset is recogniz ed when it is probable that sufcient t axable income will arise that the deferred t ax asset can be ofset a gains t . Deferred t ax assets are v alued as of the balance sheet date , and an y potential pre viously un v alued deferred t ax asset is recogniz ed when it is e xpected to be usable , or correspondin g ly , reduced when it is e xpected to be wholly or partly unusable a gains t future t axable income . Current and deferred t ax es are pos ted directly to other comprehensiv e income if the rele v ant underlyin g tr ansaction or e v ent is pos ted directly to other comprehensiv e income in the period, or pre vious period if it pert ains to an adjus tment of an openin g balance of ret ained earnin g s as the result of a chan g e in accountin g principle . Chan g es in current and deferred t ax es that relates to e x chan g e r ate diferences in the tr anslation of the balance sheets of foreign subsidiaries are pos ted to tr anslation diferences in other comprehensiv e income . Pro visions are allocated for es timated t ax es on dividends paid from subsidiaries to the Parent Compan y in the follo win g y ear . 77 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012