Page 74 - EVRY Annual Report 2012

Annual Accounts Group 74
Sales of goods are recognised as revenue at the time of delivery, i.e. when control passes to the purchaser. Goods include
both hardware and software. Sales of goods are recognised as revenue at the time of delivery, i.e. when control passes
to the purchaser. Sales of licences and rights to use software are recognised at the date the contract is signed since this
corresponds to the time at which the software is made available to and can be used by the customer. Revenue from sales
of software is separated frommaintenance revenue on the basis of a separate pricing model and contractual structure.
Revenue from software developed specifically for customers is recognised over the development period in line with 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 consulting services is recognised as the services are provided. Sales of services on a fixed fee basis are rec-
ognised in line with 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.
Cost of goods sold comprises directly allocated costs related to the delivery of goods, including maintenance and opera-
tional leasing of hardware and software, as well as the cost of consulting services that are directly related to the turnover
of the goods. The costs of employing external consultants that are used for the group’s normal operations and that are
re-charged to customers are classified as cost of goods sold.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset.
Borrowing costs consist of interest and loan set-up fees that are incurred in connection with the borrowing of funds.
Borrowing costs that cannot be directly attributed to the acquisition, construction or production of an asset are charged
to profit and loss as interest expenses in the current period.
Taxation
The tax charge is made up of tax payable and changes in deferred tax liabilities/deferred tax assets. With the exception of
associated companies where the exemptionmethod is applied, the value of deferred tax liabilities/deferred tax assets in the
statement of financial position is calculated on the basis of all differences between accounting and taxation values of assets
and liabilities (liabilitymethod).The amount provided includes all types of difference, and is calculatedwithout being
discounted to present value. Deferred tax liabilities and deferred tax assets are calculated based on approved tax rates at the
time of reporting and netted to the extent that temporary timing differences can be reversed under the same tax system.
Deferred tax asset is capitalised in the statement of financial position to the extent that it is considered likely that the
company in question will have sufficient taxable profit in subsequent periods to make use of the deferred tax asset. At
each year end, the group carries out a review of deferred tax asset not capitalised to the statement of financial position
and their accounting value. Deferred tax asset not previously capitalised to the statement of financial position is capi-
talised to the extent that it appears likely from the review that the company in question will be able to make use of the
deferred tax asset. Similarly, companies will reduce the capitalised value of deferred tax asset to the extent that they are
no longer able to use the tax asset in question.
Tax payable and deferred tax liabilities/deferred tax assets are applied directly to equity to the extent that they relate to
items that are applied directly to equity. Items that are reported as “other income and costs” are presented on a post-tax
basis in the statement of comprehensive income.
Earnings per share
Earnings per share is calculated by dividing the parent company shareholders’ share of the profit/loss for the year by the
weighted average number of ordinary shares outstanding over the course of the period. When calculating diluted earn-
ings per share, the average number of shares outstanding is adjusted for all share options that have a potential dilutive
effect. Options that have a dilutive effect are treated as shares from the date they are issued.
Classification of current and non-current items
An asset/liability is classified as a current asset/liability if it satisfies any of the following criteria:
a) it is to be sold in, or held for sale or use in, the normal turnover of the group’s business,
b) it is primarily held for trading,
c) it is expected to be realised within 12 months of the accounting period date,
or
d) it is in the form of cash or cash-equivalent assets.
All other assets/liabilities are classified as non-current assets/liabilities.