Page 73 - EVRY Annual Report 2012

Annual Accounts Group 73
c) the ability to appoint or remove the majority of the members of the board of directors or equivalent corporate
body and the board of directors or corporate body has operational control of the undertaking, or
d) control over the majority of the votes of the board of directors or of the equivalent corporate body and the board
of directors or corporate body has operational control of the undertaking.
Subsidiaries are accounted for in accordance with the acquisitionmethod, whereby the acquisition cost of the shares is
offset against the subsidiary’s equity at acquisition date. Any excess value resulting from this treatment at the time of
purchase is allocated to identifiable assets and is depreciated over their expected life. Goodwill is not depreciated.
Subsidiary companies prepare their accounts using the same reporting periods and the same accounting principles as the
parent company. Subsidiaries are consolidated from the date onwhich the group gains financial and operational control
until such time as it ceases to exercise such control. All intra-group transactions and balances, purchases and sales between
companies in the group and unrealised internal gains are netted off in the accounts.The proportion of comprehensive
income attributable to non-controlling ownership interests is deducted fromcomprehensive income and presented on a
separate line in the statement of comprehensive income.The group’s comprehensive income is attributed to the parent
company’s owners and to the non-controlling interests, evenwhere this causes non-controlling interests to be negative.
At the time of acquisition, non-controlling ownership interests are calculated either as their portion of identified assets or
to fair value.The choice of method is made at the date of acquisition for each business combination.The share of profits is
calculated on the basis of the subsidiary’s post-tax profit, as included in the consolidated accounts after internal netting.
In the event of a business combination under the same control, the combination is recognised in accordance with the
continuity principle. This means that assets and liabilities are not measured at the time a combination is implemented.
Transaction costs in this respect are recognised as other operating costs in the presentation of comprehensive income.
Companies in which the group has significant influence in financial and operational matters are recognised in accor-
dance with the equity method of accounting. The group is normally assumed to have significant influence if its owner-
ship interest is between 20% and 50%. The group’s share of the company’s profit/loss after tax, net of any write-down
of excess value, is shown in the statement of comprehensive income as ‘Share of profit/loss in associated companies’.
The group recognises its ownership interest in joint ventures on the basis of proportional consolidation. The group’s
share of assets and liabilities and of income and expenses is recognised on the equivalent lines in the consolidated ac-
counts on a line for line basis. Adjustments are made where necessary to adapt the accounting principles used to the
group’s accounting principles.
If the group ceases to have a controlling influence over a subsidiary, the subsidiary’s assets, liabilities, non-controlling
ownership interests and any accrued translation differences are reversed. The remaining investment at the time that the
group ceased to have a controlling influence is measured at fair value, and any gain or loss is recognised in the accounts.
Transactions in foreign currency
Transactions in foreign currencies are translated at the exchange rate at the date of the transaction. Currency gains/
losses that arise as a result of changes in the exchange rate between the date of the transaction and the payment date are
recognised to profit and loss. Currency gains/losses that relate to receivables/liabilities that form part of net investment
in overseas units are netted against financial income/financial expense in the consolidated accounts and formpart of
comprehensive income for the year.
Assets and liabilities of foreign subsidiaries that use a functional currency other than Norwegian kroner are translated on
the accounting period date at the exchange rate on the accounting period date, while profit and loss items are translated
at the average exchange rate during the accounting period.
Upon disposal of a foreign subsidiary, the cumulative translation difference in respect of the subsidiary is recognised
to profit and loss. If part of a receivable/liability that is treated as part of net investment in a foreign unit is realised, a
proportionate share of the cumulative translation difference is recognised to profit and loss.
Recognition of revenue and costs
Where operating services are provided through volume-based contracts, revenue is recognised on the basis of the actual
use of services by the customer, or on a linear basis over the period of the contract for term-based contracts. Sales of dia-
logue services are recognised as revenue on the basis of actual customer usage. Revenue from a transition project that is
an integral part of a subsequent operating services contract is recognised on a linear basis over the period of the operat-
ing services contract. Revenue from a transition project that is not related to an operating services contract is recognised
on the basis of the degree of completion. The degree of completion is calculated on the basis of the number of hours of
work delivered to date divided by the total number of hours estimated for the delivery in total.
Revenue from service andmaintenance agreements, as well as the expenses involved in carrying out such agreements, is
recognised in the accounts over the period of the contract.