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The annual report for Intrum Justitia AB (publ) is prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as approved by the EU Commission for application within the EU. Further, the Swedish Financial Accounting Standards Council's recommendations RR 30:05 Supplementary Rules for Consolidated Financial Statements and RR 32:05 Accounting in Legal Entities have been applied.
The Parent Company applies the same accounting principles as the Group except in the cases noted below under the section on the Parent Company's accounting principles.
Assumtions
The Parent Company's functional currency is Swedish kronor (SEK), which is also the reporting currency for the Parent Company and for the Group. The financial reports are therefore presented in SEK. All amounts, unless indicated otherwise, are rounded off to the nearest million, with one decimal. Assets and liabilities are carried at historical cost, with the exception of certain financial assets and liabilities, which are carried at fair value.
The preparation of financial reports in accordance with IFRS requires Management to make estimates and assumptions that affect the application of the accounting principles and the carrying amounts of assets, liabilities, revenue and expenses. Estimates and assumptions are based on historical experience and a number of other factors that under current circumstances seem reasonable. The result of these estimates and assumptions is then used to determine the carrying amount of assets and liabilities that otherwise is not clearly indicated by other sources. Actual outcomes may deviate from these estimates and assumptions.
Estimates and assumptions are reviewed regularly, and the effect on carrying amounts is recognized through profit or loss. Changes in estimates are reported in the period in which the change is made, provided it has affected only this period, or the period the change was made and future periods if the change affects both current and future periods.
Estimates made by Management that have a significant impact on the financial reports and estimations, which could necessitate significant adjustments in financial reports in subsequent years, are described in more detail in Note 35.
The accounting principles described below for the Group have been applied consistently for all periods in the Group's financial reports, unless otherwise indicated. The accounting is based on the Group's opening balance sheet according to IFRS as of January 1, 2004, which was included in last year's annual report. The Group's accounting principles have been applied consistently in the consolidation of the Parent Company, subsidiaries, associated companies and joint ventures.
The annual report and consolidated accounts have been approved for release by the Board of Directors on March 16, 2007. The consolidated income statement and balance sheet and the Parent Company's income statement and balance sheet will be presented to the Annual General Meeting on April 25, 2007 for adoption.
Changes in accounting principles
Changes that entered into force in 2006
A number of amendments to IFRS entered into force in 2006. One of them is the amendment to IAS 19 Employee Benefits, which the EU Commission approved, which permits actuarial gains and losses on defined benefit pensions to be recognized directly against shareholders' equity. This new rule is not applied by Intrum Justitia in the annual accounts for 2006. As the Group has only limited defined benefit pensions, the effect would be insignificant.
There are also new IFRS rules on net investments in independent foreign operations, hedging accounting, the fair value option and financial guarantees. These amendments do not have a significant impact on Intrum Justitia's reporting, either.
For more information, see the Annual Report 2006.
