P1. Basis of preparation


The parent company Telia Company AB’s financial statements have been prepared in accordance with the Swedish Annual Reports Act, other Swedish legislation, and standard RFR 2 “Accounting for Legal Entities” and other statements issued by the Swedish Financial Reporting Board. The standard is applicable to Swedish legal entities whose equities at the end of the reporting period are listed on a Swedish stock exchange or authorized equity market place. In their consolidated financial statements such companies have to comply with the EU regulation on international accounting standards, while they still have to comply with the Annual Reports Act in their separate financial statements. RFR 2 states that as a main rule listed parent companies should apply IFRSs and specifies exceptions and additions, caused by legal provisions or by the connection between accounting and taxation in Sweden.

Measurement bases and significant accounting principles

With the few exceptions below, Telia Company AB applies the same measurement bases and accounting principles as described in Notes to consolidated financial statements (Note C3).



Accounting treatment

Group contributions


Under certain conditions, it is possible to transfer profits through group contributions between Swedish companies in a group. A group contribution is normally a deductible expense for the contributor and a taxable income for the recipient. Group contributions are recognized as appropriations in the income statement.

Borrowing costs

P5, P8, P9

Borrowing costs directly attributable to the acquisition, construction or production of an asset are not capitalized as part of the cost of that asset.

Investments in subsidiaries and associated companies

P5, P10

Shares in subsidiaries and associated companies are recognized at cost less any impairment. Dividends received are brought to income while a repayment of contributed capital reduces the carrying value.

Provisions for pensions and employment contracts

P5, P14

Pension obligations an pension expenses are recognized in accordance with the simplification rule for pensions in RFR 2 “Accounting for legal entities.”

Untaxed reserves and appropriations


Untaxed reserves and appropriations are reported gross excluding deferred tax liabilities related to the temporary differences.

Capitalized development expenses


The corresponding amount that has been capitalized as development expenses in the balance sheet as intangible assets have been recognized in the reserve for capitalized development expenses in equity.

Leasing agreements


All leasing agreements are accounted for as operating leases.

Amounts and dates

Unless otherwise specified, all amounts are in millions of Swedish kronor (SEK million) or other currency specified and are based on the twelve-month period ended December 31 for income statement and cash flow statement items, and as of December 31 for balance sheet items, respectively.

Recently issued accounting standards

For information relevant to Telia Company AB, see Notes to consolidated financial statements (corresponding section in Note C1).

Key sources of estimation uncertainty

For information relevant to Telia Company AB, see Notes to consolidated financial statements (Note C2).