IAS/IFRS Reporting 

Basware transferred to reporting according to International Financial Reporting Standards (IFRS) as of January 1, 2005. Before this the Group reported according to the Finnish Accounting Standards (FAS). The comparative figures for 2004 have been changed to comply with IFRS.

At BasWare, the most significant changes of the transition to IFRS in the comparison year 2004 relate to capitalization of certain product development expenses as well as to revenue recognition and the treatment of goodwill. Other adjustments effecting earnings in the comparison year 2004 incurred from the processing of fixed asset lease agreements defined as financial lease liabilities and warrants granted to employees.

Due to a change in the disability pension system of the Employees’ Pensions Act (TEL), the recognition of pension liabilities regarding disability pension was ceased in the comparison year. Pension liabilities have been entered in the Group’s opening balance sheet on January 1, 2004 but the liabilities was entered as income during the financial year of 2004.

Change in revenue recognition caused a one-time allocation difference: a significant part of net sales adjustments of the opening balance sheet were entered as income later in the same year.

The capitalization of product development costs was initiated already under the Finnish Accounting Standards (FAS) in 2004 when a total of EUR 1 062 thousand of development costs were capitalized. Product development projects prior to 2004 have not been capitalized as the amount of capitalization cannot be reliably determined.

Commodities acquired with financial leases were added to the tangible and intangible assets of the opening balance sheet. In the reconciliation for 2004, commodities acquired with financial leases are included also in the figures according to FAS.

Group Key Figures 2004 IFRS vs. FAS

FAS IFRS FAS
EUR thousand 1–12/2004 1–12/2004 1–12/2003
Net sales 32 640 33 891 25 597
Operating profit 4 663 6 256 1 133
% of net sales 14.3% 18.50% 4.4%
Profit before tax 4 526 6 119 1 031
% of net sales 13.9% 18.10% 4.0%
Profit for the period 2 801 4 018 564
% of net sales 8.6% 11.9% 2.2%
 
Return on equity, % 25.2% 38.3% 5.6%
Return on investment, % 36.3% 50.8% 10.2%
Interest-bearing liabilities 1 645 1 645 2 075
Cash and cash equivalents 5 789 5 789 3 633
Gearing, % -34.0% -34.1% -15.4%
Equity ratio, % 58.6% 58.8% 63.0%
Total assets 20 779 20 680 16 003
 
Earnings per share, EUR 0.33 0.47 0.07
Earnings per share (diluted), EUR 0.32 0.47 0.07
Equity per share, EUR 1.41 1.41 1.18