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Consolidated financial statements • 79
SECTION 1: BASIS OF REPORTING
This section introduces PANDORA’s accounting policies
and significant accounting estimates. A more detailed
description of accounting policies and significant 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
disclosure for each note.
BASIS OF REPORTING
PANDORA A/S is a public limited company with its
registered office in Denmark.
The Annual Report for the period 1 January - 31
December 2016 comprises the consolidated financial
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 accordance
with International Financial Reporting Standards (IFRS)
as adopted by the EU and additional Danish disclosure
requirements for the annual reports of listed companies.
The Annual Report has been prepared on a historical
cost basis, except for derivative financial instruments, 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.
The accounting policies as described below and in the
respective notes are unchanged from last year.
Alternative performance measures
PANDORA presents financial measures in the Annual
Report that are not defined according to IFRS. PANDORA
believes these non-GAAP measures provide valuable
information to investors and PANDORA’s management
when evaluating performance. Since other companies
might calculate these differently from PANDORA, they
may not be comparable to the measures used by other
companies. These financial measures should therefore not
be considered to be a replacement for measures defined
under IFRS. For definitions of the performance measures
used by PANDORA, refer to 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 PANDORA’s
accounting policies:
Revenue
note
2.1
Staff costs
note
2.3
Share-based payments
note
2.4
Income tax
note
2.5
Deferred tax
note
2.5
Intangible assets
note
3.1
Property, plant and equipment
note
3.2
Inventories
note
3.3
Trade receivables
note
3.4
Provisions
note
3.5
Dividend
note
4.2
Net interest-bearing debt
note
4.3
Derivative financial instruments
note
4.5
Net financials
note
4.6
Business combinations
note
5.1
The consolidated financial statements
The consolidated financial statements comprise the
financial statements of the Parent Company and its
subsidiaries. Subsidiaries are fully consolidated from the
date of acquisition, being the date on which PANDORA
obtains control, until the date that such control ceases. All
intercompany balances, income and expenses, unrealised
gains and losses and dividends resulting from intercompany
transactions are eliminated in full.
Foreign currency
The consolidated financial statements are presented in
Danish kroner, DKK, which is also the functional currency
of the Parent Company. Each subsidiary 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
1.1
NOTES