Komplett Bank annual report 2019

6. Currency The Bank uses NOK as its presentation currency. Balance sheet items in foreign currency are converted to NOK using the currency exchange rate at the balance sheet date. Items in foreign currency included in the income statement are converted to NOK using the average exchange rate. Over the course of the year, the Bank did not receive any significant revenue in any currency other than NOK, SEK and EUR. The Bank also did not incur any significant costs in any currency other than NOK, SEK and EUR. The Bank’s functional currency is NOK. Currency exchange differences that are recognised in the statement of profit or loss as of 31.12.2019 equalled NOK 8.0 million in cost. The Bank’s currency exposure as at 31.12.2019 is EUR 7.7 million and SEK 32.6 million. 7. Estimates The estimation of valuation items and discretionary valuations is based on the Bank’s historical experience and likely expectations of future events. The Bank regards loss provisions as described in item 1 as a central valuation item where discretionary valuations also act as a basis. 8. Business areas The Bank views its business as a collective business area. The business area is linked to unsecured financing and as at 31 December 2019 consisted of three loan products (credit card and loans, and POS solutions in cooperation with the Komplett Group) and deposit products for Norwegian and German customers. In 2018, all business were directed at the Norwegian, Swedish and Finnish markets and there was no significant differentiation connected with regular monitoring, management and controls in the Bank’s geographical business areas. The management of the Bank also calls for uniform reporting of business areas. The company’s top management is the Bank’s Board of Directors. The disclosures presented in Note 2 under the headline “information on products and geographical distributions” are the same as used for internal management. 9. Statement of cash flow The statement of cash flow has been prepared according to the indi- rect method. Cash and cash equivalents consist of bank deposits. 10. Share-based remuneration Options value for the granted options are established based on the full market value calculated using observed trading prices at the grant date and Black & Scholes’s option pricing model. Risk-free interest, using 5-year government bonds, is used as a prerequisite in the calculation. The fixed price for exercising the positions is NOK 1 for all outstanding options. In the case of options granted in 2015 and later, there is also a variable price for exercising the positions, which is equivalent to the employer’s contribution at the date of exercise. The value of vested options is recognised in other paid-in equity. 11. Leasing agreements IFRS 16 - Leases is a new standard that entered into force from 1 January 2019 and replaced IAS 17 Leases. The new standard removes the distinction between operating and finance leases for the lessee and is a model to be used for all leases with individual specific exceptions. Assets are depreciated over the lease term, while the commitment is measured at the present value of agreed, not paid lease. Leases will be treated as financial instruments included in the scope of application of IFRS 9 for impairments. See note 23 for further information on the Bank’s leasing agreements. 46 Notes to the financial statements