Pandora_Annual_Report_2018

This section introduces Pandora's accounting pol- icies and significant accounting estimates. A more detailed description of accounting policies and sig- nificant estimates related to specific reported amounts is presented in the respective notes. The purpose is to provide transparency on the disclosed amounts and to describe the relevant accounting policy, significant estimates and numerical disclo- sure for each note. Pandora A/S is a public limited company with its registered office in Denmark. The Annual Report for the period 1 January - 31 December 2018 comprises the consolidated finan- cial statements of Pandora A/S and its subsidiaries (the Group) as well as separate financial statements for the Parent Company, Pandora A/S. The Annual Report has been prepared in accord- ance with International Financial Reporting Stand- ards (IFRS) as adopted by the EU and additional requirements of the Danish Financial Statements Act. The Annual Report has been prepared on a histor- ical cost basis, except for derivative financial in- struments, which have been measured at fair value. The Annual Report is presented in Danish kroner and all amounts are rounded to the nearest million (DKK million), unless otherwise stated. Apart from the changes due to the implementation of new or amended standards and interpretations as described in note 1.2, accounting policies as described below and in the respective notes are unchanged from last year. ALTERNATIVE PERFORMANCE MEASURES Pandora presents financial measures in the Annu- al Report that are not defined according to IFRS. Pandora believes these non-GAAP measures pro- vide valuable information to investors and Pandora´s management when evaluating perfor- mance. Since other companies may calculate these differently from Pandora, they may not be comparable to the measures used by other com- panies. These financial measures should therefore not be considered to be a replacement for meas- ures defined under IFRS. For definitions of the performance measures used by Pandora, see note 5.6. Accounting policies The overall accounting policies applied to the Annual Report as a whole are described below. The accounting policies related to specific line items are described in the notes to which they relate. The description of accounting policies in the notes forms part of the overall description of the ac- counting policies of Pandora: NOTE 1.1 Principal accounting policies CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements comprise the financial statements of the Parent Company and its subsidiaries. Subsidiaries are fully consoli­ dated from the date of acquisition, being the date on which Pandora obtains control, until the date that such control ceases. All intercompany bal- ances, income and expenses, unrealised gains and losses and dividends resulting from intercompany transactions are eliminated in full. FUNCTIONAL AND PRESENTATION CURRENCY The consolidated financial statements are present- ed in Danish kroner, DKK, which is also the func- tional currency of the Parent Company. Each sub- sidiary determines its own functional currency, and items recognised in the financial statements of each entity are measured using that functional currency. TRANSACTIONS AND BALANCES Transactions in foreign currencies are initially recognised in the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities de- nominated in foreign currencies are translated at the functional currency spot rate of exchange rul- ing at the reporting date. All adjustments are rec- ognised in the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are trans- lated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. 2.1 Revenue from contracts with customers 2.3 Staff costs 2.4 Share-based payments 2.5 Taxation, income taxes 2.5 Taxation, deferred tax 3.1 Intangible assets 3.2 Property, plant and equipment 3.3 Business combinations 3.4 Inventories 3.5 Trade receivables 3.6 Provisions 3.7 Contract assets and liabilities 4.2 Earnings per share and dividend 4.3 Net interest-bearing debt 4.5 Derivative financial instruments 4.6 Net financials P A N D O R A A N N U A L R E P O R T 2 0 1 8 C O N T E N T S G R O U P 5 9