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ITERA ANNUAL REPORT 2013
NOTES GROUP
REPORTING ENTITY Itera ASA (the company) is domiciled in Oslo, Norway. Itera’s consolidated financial statements for the financial year 2013 covers the company and the subsidiaries Itera Norge AS, Cicero Consulting AS, Compendia AS, Itera Offshoring Services AS, Itera Sweden AB, Itera Consulting AB, Itera Networks AB, Objectware AB, Itera Consulting ApS and Itera Consulting Ukraine.
BASIS OF PREPARATION Confirmation of financial framework The consolidated financial statements are submitted in accordance with applicable EU-approved IFRS regulations and their i nterpretations as of 31 December 2013, as well as in line with additional Norwegian information requirements which follow from the Accounting Act as of 31 December 2013. The proposed annual accounts were confirmed by the board and the CEO on 20 March 2014. The annual accounts will be considered at the ordinary general meeting on 22 May 2014. The board has the option of m aking changes to the annual accounts up until the time of final approval.
The most significant estimates requiring management judgment are the following: • • • •
Projects in progress – see note 2 Provision for losses on accounts receivable – see note 12 Capitalized development costs (R&D) – see note 13 Value of deferred tax asset – see note 15
Itera Norge AS leases operating equipment. The lease contracts have been evaluated based on the requirements stipulated in IAS 17, and it has been determined that these shall be posted as financial leasing. Reference is made to note 14. In some cases, proceeds from sales will cover several deliveries. Itera will then distribute the proceeds among the various deliveries and record this income based on the time of delivery for the various deliveries. IFRS 13 Fair Value Measurement applies as of 2013. The group has not selected policies where assets and liabilities may be recognized at fair value, or it does not have assets and liabilities which must be recognized at fair value. It has been determined that no financial instruments must be recognized at fair value.
ACCOUNTING POLICIES Basis of measurement The consolidated financial statements have been prepared on the basis of historical costs except for the following items: • Financial instruments at fair value in the profit and loss account, loans and receivables and other financial liabilities at amortized cost.
Functional and presentation currency These consolidated financial statements are presented in Norwegian kroner (NOK), which is the functional currency of the parent company. All financial information has been rounded to the nearest thousand. Balance sheet items of subsidiaries in other functional currencies are translated using the exchange rates prevailing on the balance sheet date, while profit and loss items are translated using the exchange rates on the transaction date. The average monthly exchange rate is used as an approximation of the exchange rate at the time of the transaction. Translation differences are recorded as other income and expenses.
Use of estimates and judgments The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
The accounting policies set out below have been applied consistently for all periods and by all group entities.
Basis of consolidation Subsidiaries are entities controlled by the company. Control exists when the group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that the control ceases. The accounting policies of the subsidiaries have been changed when necessary to align them with the policies adopted by the group.
Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in the consolidated financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the group’s interest in the investee. Unrealized losses are eliminated in the same manner, but only to the extent that there is no evidence of impairment.
Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the group entities at the exchange rate at the