Accounting principles

Scope of consolidation

The consolidated financial statements comprise all subsidiaries and associated companies.

More detailed information on the Group’s subsidiary and associated companies is given below under ‘Investments’.
 
The Group’s parent company is VR-Group Ltd and its domicile is Helsinki. Copies of the consolidated financial statements are available from the company’s head office at Vilhonkatu 13, P.O. Box 488, 00101 Helsinki, Finland.

 

Principles of consolidation

Mutual holdings

The consolidated financial statements are prepared using the purchase method. Goodwill on consolidation in eliminations is amortized over a period of five years.

Intragroup transactions and margins

Intragroup transactions, internal receivables and liabilities, and internal distribution of profit are eliminated.

Minority interest

Minority interest is separated from shareholder equity and the net profit and shown as a separate item.

Associated companies

Associated companies are consolidated using the equity method. The Group’s share of the results of associated companies is shown separately.

Comparability of accounts

The financial statements have been prepared in accordance with the accounting regulations in the Finnish Accounting Act of 30 December 1997 (1336). The figures for comparison are from the financial period 1 January - 31 December 2012, 12 months.

Recognition of long-term projects

Revenue from VR-Track Ltd’s construction projects is recognized as a percentage of their completion. The percentage of completion is determined by monitoring the actual project costs to date and comparing them with the estimated total costs of the project. Net turnover is calculated as the aggregate recognized percentage as a proportion of the estimated total revenue accruing from the projects.

In the case of estimated losses from long-term projects, the uncompleted percentage is entered under provisions. 

Valuation principles applied when preparing the financial statements

Fixed assets are capitalized at their direct acquisition cost. Fixed assets totalling M€ 27.8 (M€ 24.2) were produced by the company itself and include M€ 0.1 (M€ 1.5) in fixed costs related to production.
 
Stocks are valued at their average cost in line with the prudence concept of accounting. Production for own use included in stocks is valued at direct production cost. Work in progress includes variable costs accrued up to the balance sheet date.
   
Production for own use included in stocks also includes a proportion of fixed costs. Securities are valued at their purchase cost.
 
Receivables, liabilities and other commitments denominated in foreign currencies are translated into euros at the average exchange rates given by the European Central Bank on the balance sheet date.

Scheduling of pension costs

The statutory work pension insurance is arranged with an external company and the Group’s supplementary pension benefits are insured by VR-Pension Fund s.r. Pension costs are allocated as booked. VR’s pension commitments are fully covered.

Comparability of parent company accounts

The financial statements have been prepared in accordance with the accounting regulations in the Finnish Accounting Act of 30 December 1997 (1336). The figures for comparison are from the financial period 1 January - 31 December 2012, 12 months.