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financial statements 2011
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is evaluated in this respect on the end date of each
reporting period.
Recognition Policies
Revenue includes the income from the sale of prod-
ucts and services measured at fair value adjusted with
indirect taxes, discounts granted and exchange differ-
ences for foreign currency sales.
Sale of Goods
Income from the sale of goods is recognized when
the major risks and rewards incidental to ownership
of the goods have been transferred to the buyer. This
occurs normally at the time of transfer of the goods in
accordance with the contract terms and conditions.
Revenue from Sale of Services
Income from the sale of services is recognized ac-
cording to an income recognition method based on
degree of completion, provided that the degree of
completion and the associated income and expenses
can be reliably calculated. The degree of completion is
defined according to the amount of work carried out
in relation to the estimated amount of work required
to complete the whole project. If the derived costs
and recognized profits are greater than the amount
charged from the project, the difference is presented
on the balance sheet under the item “sales receiva-
bles and other receivables.” If the derived costs and
recognized profits are less than the amount charged
from the project, the difference is presented on the
balance sheet under the item “accounts payable and
other liabilities.”
Otherwise, the income from the service is recog-
nized once the service has been provided and it is likely
that the service will generate financial benefit. If it is
likely that the overall expenses required to complete
the service will exceed the overall income from the
project, the expected loss is immediately recognized as
an expense.
License and Royalty Receivables
License and royalty receivables are recognized accord-
ing to the actual content of the contract.
Interest and Dividends
Interest income is recognized using the effective inter-
est method and dividend income is recognized when
right to dividends has been established.
Non-current Assets Classified as
Held for Sale and Discontinued
Operations
Business operations are treated as discontinued or
held for sale when the management is committed
to discontinuing or selling a separate business whose
associated assets, liabilities and operating income can
be extracted as a separate unit, both operationally and
in reporting.
Once the characteristics of assets held for sale are
fulfilled, the non-current assets are recognized at the
lower of the balance sheet value or the fair value less
sales expenses. Depreciation is no longer recognized
for fixed assets. The assets and liabilities included in the
group of assets held for sale are presented separately
from the assets and liabilities of continuing operations.
The profit after taxes from discontinued or held-for-
sale operations and the sales profit or loss from their
sale are recognized separately from continuing opera-
tions in the income statement.
A discontinued operation is the part of the Group
which has been abandoned or which has been classified
as held for sale and fulfils one of the following criteria:
1. It is a significant separate business unit or a unit
representative of a geographical area.
2. It is part of a co-ordinated plan which involves the
abandonment of a separate central business area or
geographical area of operations.
3. It is a subsidiary which has been acquired for the sole
purpose of being resold.
The Group has identified the transferred assets from
the Vilppula printing unit in the group of assets held for
sale (Note 3). The Group subsidiary, Edita Prima Oy,
sold the business operations of the Vilppula unit and
the sale came into force on January 1, 2011. Tangible
fixed assets and inventory items were included in the
group of assets held for sale.
Financial Assets
The Group’s financial assets have been classified into
the following groups under ias 39: financial assets
at fair value through profit or loss, loans and other
receivables, and available-for-sale financial assets. The
classification is based on the purpose of the acquisition
of the financial asset and takes place in conjunction
with the original acquisition.
Financial instruments in the
Financial assets at
fair value through profit
or loss group are entered on
the income statement for the period in which they
arise. The derivative instruments that are in use in
the Group are included in this group. The Group uses