Accounting principles

Electrolux applies International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial reports have been prepared in accordance with IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and RFR 2 ‘Accounting for legal entities’ issued by the Swedish Financial Reporting Board.

Electrolux interim reports contain a condensed set of financial statements. For the Group this chiefly means that the disclosures are limited compared to the consolidated financial statements presented in the annual report. For the Parent Company this means that the financial statements in general are presented in condensed versions and with limited disclosures compared to the annual report.

The accounting policies applied are consistent with those applied in the preparation of the Group’s Annual Report 2018, except for the adoption of new standards effective as of January 1, 2019, and the application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the accounting of the Electrolux Professional operations, see section ‘Discontinued Operations’ below.

The Group’s accounting principles are described in Note 1 in the Annual Report 2018, including transition effects and accounting principles related to IFRS 16 Leases which is applied by Electrolux from January 1, 2019. The transition to IFRS 16 has resulted in the following opening balance adjustment:

Electrolux applies International Financial Reporting Standards (IFRS) as adopted by the European Union. This report has been prepared in accordance with IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and RFR 2 ‘Accounting for legal entities’ issued by the Swedish Financial Reporting Board.

Electrolux interim reports contain a condensed set of financial statements. For the Group this chiefly means that the disclosures are limited compared to the consolidated financial statements presented in the annual report. For the Parent Company this means that the financial statements in general are presented in condensed versions and with limited disclosures compared to the annual report.

The accounting policies applied are consistent with those applied in the preparation of the Group’s Annual Report 2018, except for the adoption of new standards effective as of January 1, 2019, and the application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the accounting of the Electrolux Professional operations, see section ‘Discontinued Operations’ below.

The Group’s accounting principles are described in Note 1 in the Annual Report 2018, including transition effects and accounting principles related to IFRS 16 Leases which is applied by Electrolux from January 1, 2019. The transition to IFRS 16 has resulted in the following opening balance adjustment:

Assets     Equity and Liabilities    
Right-of-use assets 3,172   Lease liabilities 3,465  
Deferred tax assets 90   Retained earnings -234  
Prepaid lease fees -34   Accrued lease fees -4  
Total 3,228   Total 3,228  

Discontinued operations

In January 2019, Electrolux announced that the company was preparing for the separation and distribution of its Professional Products business area (‘Electrolux Professional’). On December 5, 2019 the Electrolux Board of Directors decided to propose to the Electrolux shareholders to distribute the shares in the wholly-owned subsidiary Electrolux Professional AB to the shareholders of Electrolux. The intention is to list Electrolux Professional AB on Nasdaq Stockholm on March 23, 2020. Electrolux Professional has been classified as held for distribution to owners as per December 2019 and is accounted for under the applicable principles for assets held for sale and discontinued operations. All related effects are referred to as ‘Discontinued operations’.

As per December 2019, Electrolux Professional is reported as discontinued operations in the consolidated statement of comprehensive income for 2019. The consolidated statement of comprehensive income for 2018 has been restated accordingly. The Electrolux Professional results are excluded from the individual lines of the consolidated income statement with the total net reported as ‘Income for the period, discontinued operations’.

The consolidated cash flow statement includes a split of operating income into ‘Operating income, continuing operations’ and ‘Operating income, discontinued operations’.

In the balance sheet as per 31 December 2019, assets and liabilities of Electrolux Professional have been reclassified as ‘Discontinued operations, assets held for distribution’ and ‘Discontinued operations, liabilities held for distribution’ respectively. The balance sheet items for the previous year(s) are the historical financial statements as no restatement is allowed under IFRS. However, to facilitate comparison, restated net assets figures are also presented.

Reportable segments – Business areas

As from 2019 Electrolux has revised its consumer business area structure. The former business area Home Care & SDA has been combined with the former major appliances business areas, creating four consumer-focused regional business areas: Europe, North America, Latin America, and Asia-Pacific, Middle East and Africa. These represent the Group’s reportable segments. Comparatives have been restated accordingly. For more information, please see press release ‘Restated figures for 2018 in line with Electrolux new business area structure’ published on April 5, 2019.