Basis of Preparation
Jotun A/S is a limited liability company incorporated
in Norway. The Group’s headquarter is in
Sandefjord, Norway, and the Group including
associates and joint ventures employs around
10 000 people in 47 countries.
The Group consists of the parent company
Jotun A/S and its subsidiaries. The consolidated
financial statements consist of the Group as well
as the Group’s net interests in associates and
joint ventures.
1.1 Accounting policies
Accounting policies, estimates and judgements
are incorporated into the individual notes with
the exception of general information described in
this section.
The consolidated financial statements are
prepared based on the historical cost principle,
except for financial assets and liabilities which are
recognised at fair value.
The consolidated financial statements have been
prepared on the basis of the going concern
assumption.
Statement of compliance
The Group’s consolidated financial statements
have been prepared in accordance with
International Financial Reporting Standards (IFRS)
and interpretations as adopted by the European
Union (EU), as well as Norwegian disclosure
requirements that follow from the Norwegian
Accounting Act.
Debt and equity instruments in the Group are
not traded in a public market. Consequently,
operating segment reporting according to IFRS 8
does not apply for the Group.
Basis for consolidation
The Group’s consolidated financial statements
comprise Jotun A/S and companies in which
Jotun A/S has a controlling interest. The financial
statements of subsidiaries are fully consolidated
from the date that control commences until the
date that control ceases.
The financial statements of the subsidiaries are
prepared for the same reporting period as Jotun
A/S. All intercompany balances, income and
expenses and cash flows relating to transactions
between members of the Group are eliminated
in full.
Interests in associates and joint ventures
The Group has interests in associates and joint
ventures. An associate is an entity in which
the Group has significant, but not controlling
influence, with an ownership normally between
20 and 50 per cent. A joint venture is a jointly
controlled entity, normally with a fifty-fifty
ownership.
The Group’s investments in associates and joint
ventures are accounted for using the equity
method. Under the equity method, the Group
presents its share of the companies’ results after
tax on a separate line in the income statement.
Share of equity is reported as investments in
associates and joint ventures in the balance
sheet.
The financial statements of associates and joint
ventures are prepared for the same reporting
period and based on the same accounting
policies as for the Group.
Non-controlling interests
The non-controlling interests are presented
separately in the consolidated financial
statements representing the minority’s share of
equity and profit.
Foreign currency transactions
In the individual financial statements for each
entity in the Group, transactions in foreign
currency are initially recorded at the functional
currency rates prevailing at the date of
transaction. Monetary items in foreign currency
are translated into functional currency using the
exchange rate applicable at the balance sheet
date. Non-monetary items in foreign currency
are translated into functional currency using the
exchange rate applicable at the transaction date.
Translation of foreign operations to NOK
The Group’s presentation currency is Norwegian
Krone (NOK). This is also Jotun A/S’ functional
currency. Each entity in the Group determines
its own functional currency, and the majority of
financial statements are denominated in other
currencies than NOK.
Assets and liabilities in entities with other
functional currencies than NOK are translated
into NOK using the exchange rate applicable at
the balance sheet date. Their income statements
are translated monthly at the average exchange
rate for the month. Exchange rate differences are
recognised in other comprehensive income.
1.2 New accounting policies
The Group has applied IFRS 16 Leases for the first
time in 2019. Several other IFRS amendments and
interpretations apply for the first time in 2019,
but do not have any impact on the consolidated
financial statements for the Group.
IFRS 16 Leases
The Group has implemented IFRS 16 Leases
effective for the annual reporting period
beginning 1 January 2019. IFRS 16 Leases
supersedes IAS 17 Leases, and the standard sets
out principles for the recognition, measurement,
presentation and disclosure of leases. The new
Back to Notes for the Group
standard requires lessees to account for most
leases on the balance sheet. See Note 5.4 for
further details.
1.3 Estimates and judgements
In preparing the consolidated financial
statements, Management makes various
accounting estimates and assumptions that form
the basis of the presentation, recognition and
measurement of Jotun’s assets and liabilities.
Determining the carrying amounts of some assets
and liabilities requires estimates and assumptions
concerning future events. Estimates and
assumptions are based on historical experience
and other factors, which Management assesses
to be reasonable, but which by their nature
involve uncertainty and unpredictability.
These assumptions may have to be revised as
unexpected events or circumstances may occur.
The areas that involve a high degree of
judgement and are material to the financial
statements are described in more detail in the
relevant notes.
1.4 Events after the balance
sheet date
New information regarding the Group’s financial
position at the end of the reporting period
and that becomes known after the reporting
period, is recorded in the annual accounts.
Events after the reporting period that do not
affect the Group’s financial position at the end
of the reporting period, but which will affect
the Group’s financial position in the future, are
disclosed if significant.
No events have taken place after the balance
sheet date that would have affected the financial
statements, or any assessments carried out.
JOTUN GROUP
21