NOTES
Consolidated financial statements •63
SECTION 1: BASIS OF REPORTING
This section introduces PANDORA’s accounting policies
and significant accounting estimates.Amore detailed
description of accounting policies and significant estimates
related to specific reported amounts is presented in the
respective notes. This is done toprovide full transparency
on the disclosed amounts, describing the relevant
accounting policy, significant estimates and numerical
disclosure for each note.
BASISOF REPORTING
PANDORAA/S is a public limited companywith its
registered office inDenmark.
TheAnnual Report for the period 1 January - 31
December 2014 comprises the consolidated financial
statements of PANDORAA/S and its subsidiaries (the
Group) aswell as separate financial statements for the
Parent Company, PANDORAA/S.
The consolidated financial statements have been
prepared in accordancewith International Financial
Reporting Standards (IFRS) as adopted by the EU and
additional Danishdisclosure requirements for the annual
reports of listed companies.
The consolidated financial statements have been
prepared on a historical cost basis, except for financial
instruments, which have beenmeasured at fair value.
The consolidated financial statements are presented in
Danish kroner and all amounts are rounded to the nearest
million (DKKmillion) except where otherwise indicated.
The accounting policies as described below and in
the respective notes have beenused consistently for the
financial year and for the comparative figures.
Accounting policies
The overall accounting policies applied to the consolidated
financial statements as awhole are described below.
The accounting policies related to specific line items are
described in connectionwith the notes towhich they relate.
The description of accounting policies in the notes
forms part of the overall description of 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
Financial instruments
note
4.5
Net financials
note
4.6
Business combinations
note
5.1
The consolidatedfinancial statements
The consolidatedfinancial statements comprise the
financial statements of the Parent Company and its
subsidiaries. Subsidiaries are fully consolidated from the
date of acquisition, being the date onwhichPANDORA
obtains control, and continue to be consolidated until the
date that such control ceases.The financial statements
of the subsidiaries are prepared for the same reporting
period as the Parent Company, using consistent accounting
policies. 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
DKK, which is also the functional currency of the Parent
Company. Each entity in theGroup determines its own
functional currency, and items recognised in the financial
statements of each entity aremeasured using that functional
currency.
Transactions andbalances
Transactions in foreign currencies are initially recognised
by theGroup entities at their respective functional currency
rates prevailing at the date of the transaction.Monetary
assets and liabilities denominated in foreign currencies are
retranslated at the functional currency spot rate of exchange
ruling at the reporting date. All differences are recognised in
the income statement.
Non-monetary items that aremeasured in terms of
historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-
monetary itemsmeasured at fair value in a foreign currency
are translated using the exchange rates at the datewhen the
fair value is determined.
1.1
