Note 2 Estimates and assessments

Note 2 Estimates and assessments

In making these financial reports, Group Management has made assessments, estimates and assumptions that affect the group’s reported accounts. These estimates and assumptions are based on what is known at the time the financial reports are presented, as well as historical experience and assumptions that the Group Management considers reasonable under the current circumstances. The conclusions drawn by Group Management form the basis for the reported values in the accounts. Actual future values, estimates and assessments in future financial reports during the coming financial year may differ from those in this report, due to changing environmental factors and new knowledge and experience. The most significant estimates and assessments for PostNord have been made in the areas described below.

Postal obligation, SEK 403m (398)

PostNord’s postal obligation is calculated for stamps which have been sold but not used. Assumptions used in calculating the postal obligation affect the size of the obligation. Assumptions are based on the number of stamps sold but not used in Sweden and Denmark. Investigations are conducted in Sweden and Denmark to ensure that the assumptions are reasonable. The size of the obligation may be affected in cases where investigations show changes in the behavior of the population or where a sample group is not representative of the population.

Intangible assets, SEK 4,892m (4,769)

Assumptions are made about future conditions in order to calculate future cash flows that determine the recoverable value of goodwill, brand and customer relations. The recoverable value is compared with the reported value for these assets and forms the basis for possible impairment or reversals. The assumptions that affect the recoverable value most are future volume development, profit margin development, the discount rate and estimated useful life of the asset. If future environmental factors and circumstances change, these assumptions may be affected so that the reported values of intangible assets are changed.

Pension commitments, assets of SEK 609m (liabilities of SEK 2,070m)

In order to arrive at a reasonable estimate for PostNord’s defined pension commitments, the actuarial valuation of such commitments is based on a number of assumptions. The most significant assumptions are discount rate, expected rate of return on assets under management, future annual pay increases, and inflation. Changes in pension commitments due to altered external factors may affect PostNord’s operating profit, net financial items and other comprehensive income as well as financial receivables and pension liabilities reported in the balance sheets. Changed commitments affect the forecast for the next year’s costs.

Provisions for transition regulations, SEK 746m (781)

As a consequence of Posten AB becoming a Swedish corporate entity in 1994, PostNord assumed a contingent liability (transition regulations) such that certain categories of the workforce may choose to retire early, at the age of 60 or 63. The contingent liability is reported as a provision in the balance sheet and is calculated based on previous experience of the proportion of persons who have chosen to exercise their right to early retirement in accordance with these provisions. If the number of those who choose this option should change, the liability will change accordingly. A change in the utilization rate of 5 percentage points impacts operating profit by +/– SEK 4m.

Deferred tax assets, SEK 540m (1,413)

The capitalization of tax loss carry-forwards has been assessed based on business plans and estimates of future taxable profits that can utilize tax loss carry-forwards. Estimates have been made of non-deductible costs and non-taxable income in accordance with current tax regulations. Furthermore, consideration has been taken of foreseeable future financial results in order to evaluate the reported tax claim at the currently applicable tax rates. Changes to tax legislation in Sweden and other countries where PostNord operates and changes in interpretation and application of applicable legislation may influence the size of reported tax assets and liabilities. Changed circumstances that impact the assumptions will also influence financial results for the year.