Note 1 Accounting principles Komplett Bank ASA (“the Bank”) offer consumer loans and credit cards to private individuals in Norway (“NO”), Sweden (“SE”) and Finland (“FI”), high yield accounts in Norway and Sweden and point of sales (POS) finance products in collaboration with the Komplett Group. In addition, the Bank offers euro denominated deposit products to private individuals in Germany. The Bank’s headquarter is in Vollsveien 2, 1366 Lysaker, in Norway. The financial statements for 2022 have been prepared in accordance with International Financial Reporting Standards (IFRS) as approved by the European Union, and have been approved for publication on March 15, 2023. Unless otherwise directly indicated in the notes, amounts are stated in NOK millions. 1. Income recognition The interest income is recognized using the effective interest method. This involves continuous recognition of interest income, along with the amortization of establishment fees. The effective interest rate is the rate that discounts the contractual cash flows of the loan (interest, repayments, and fees) over the expected term to the loan’s amortized cost at the time of establishment. The recognition of interest income using the effective interest method is used for balance sheet items that are valued at amortized cost. For assets that are not impaired, the effective interest rate is calculated on the asset’s book value before provisions for losses. For impaired assets, the effective interest rate is calculated on the asset’s book value (amortized cost). For interest-bearing balance sheet items that are valued at fair value through profit or loss, changes in value are recognized as ”Net gains/(losses) on securities and currencies”. Fees and commissions are recognized as revenue as services are provided. Fees for the establishment of loan agreements are included in the cash flows when calculating the amortized cost and recognized as part of net interest income using the effective interest method. The same applies to the payment of fees to intermediaries for consumer loans and credit cards. 2. Financial instruments Financial assets and liabilities mainly consist of loans to and deposits with credit institutions, loans to customers, certificates and bonds, deposits from customers and subordinated loans. Financial instruments are recognised in the balance sheet on the date the Bank will become party to the instrument’s contractual terms. Loans to customers are recognised in the financial position at the time when the loan is paid out to the customer. Financial assets are derecognised when the Bank’s rights to receive cash flows from the asset cease. Financial liabilities are derecognized from the date the rights to the contractual terms are fulfilled, expired or cancelled. 2a. Financial liablities Financial liabilities, which consist of deposits from customers, subordinated loans and parts of other debt, are recognised at fair value less any transaction costs on establishment. In subsequent periods, the liabilities are measured at amortised cost in accordance with the effective interest method (internal rate of return). 2b. Financial assets On initial recognition, financial assets are classed in one of the categories pursuant to the table below, depending on the Bank’s business model for management of the assets and the hallmarks Komplett Bank / Annual Report 2022 47
RkJQdWJsaXNoZXIy NTYyMDE=