Investor Presentaiton
CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | BASIS OF PREPARATION
adopted by the European Union, observing the standards and
interpretations effective on December 31, 2021.
KONE has adopted the new standards and interpretations
that took effect during the accounting period and are relevant
to its operations. The IFRS standards and amendments
thereto that took effect in 2021 did not have a material impact
on the result or the financial position of the Group or on the
presentation of the financial statements.
The consolidated financial statements have been prepared
for the reporting period of 12 months from January 1 to
December 31, 2021. The financial statements have been
authorized for issue by the Board of Directors of KONE
Corporation on February 2, 2022. According to the Finnish
Companies' Act the Annual General Meeting has the right to
approve, reject or make changes to the financial statements
after the publication.
The consolidated financial statements are presented in
millions of euros and prepared under the historical cost
convention except as disclosed in the accounting principles.
Further, trade date accounting has been applied to all
financial assets and liabilities. Amounts presented in these
financial statements have been rounded from exact values
and therefore the sum of amounts presented individually can
deviate from the presented sum amount calculated based on
the exact values. Key figures have been calculated using
exact values.
CONSOLIDATION PRINCIPLES
The consolidated accounts include the parent company and
those companies in which the parent company held, directly
or indirectly, more than 50 percent of the voting power or had
control through management agreements with shareholders
holding the majority of the voting power at the end of the
reporting period. In addition to these holdings, the
consolidated accounts include possible holdings that are of a
controlling-right nature (units/companies established for a
specific reason). Subsidiaries acquired during the period were
included in the consolidated financial statements from the
date of acquiring the control, and divested subsidiaries up to
the date of loss of control. Inter-corporate shareholdings have
been eliminated using the acquisition method. The acquisition
consideration, including deferred and contingent
consideration, as well as the identifiable assets acquired and
liabilities assumed, are measured at the acquisition date fair
values. The acquisition-related costs are recognized as
expenses in the period in which they are incurred.
At the acquisition date, the non-controlling interests are
valued either at the acquisition date fair values or at non-
controlling interests' proportionate share in the recognized
amounts of the identifiable net assets. Net income for the
period is disclosed in the statement of income as an allocation
to the shareholders of the parent company and non-controlling
interests. The allocation of the comprehensive income to the
shareholders of the parent company and non-controlling
interests is presented in the statement of comprehensive
income. Non-controlling interests' share of total equity is
disclosed separately under total consolidated equity.
All inter-corporate transactions, receivables, liabilities and
unrealized profits, as well as the distribution of profits within
the Group have been eliminated in the consolidated financial
statements.
The results and financial position of foreign operations that
have a functional currency different from the presentation
currency of the Group, have been translated into the
presentation currency as follows: assets and liabilities at the
statement of financial position date closing rate, and income
and expenses at average exchange rates of the reporting
period. The resulting exchange rate differences have been
recognized in other comprehensive income.
SEGMENT INFORMATION
The profitability of KONE is presented as a single entity.
KONE's business concept is to serve its customers by
providing solutions throughout the entire life cycle of the
equipment, beginning from the installation of new equipment
to the maintenance and modernization during their life cycle
and the full replacement of the equipment. Most of the
equipment that are delivered are converted into long-term
KONE maintenance contracts. KONE's operating business
structure is globally harmonized based on defined business
processes. Material operative decisions are made by the
Board of Directors of KONE. Such decisions are prepared and
presented by the Chairman of the Board and the President
and Chief Executive Officer. Due to the business model of
KONE, the nature of its operations and its governance
structure, the Group as a whole is considered the relevant
operating segment to be reported.
ACCOUNTING ESTIMATES AND
MANAGEMENT JUDGEMENTS
The preparation of the financial statements in accordance with
the IFRS requires management to make judgements,
estimates and assumptions that affect the measurement of
the reported assets and liabilities and other information, such
as contingent assets and liabilities and the recognition of
income and expenses in the consolidated statement of
income. Although these estimates and assumptions are based
on the management's best knowledge of current events and
actions, actual results may differ from the estimates.
For KONE the most significant judgements, estimates and
assumptions made by the management relate to revenue
recognition, especially to defining and determining principles
for revenue recognition in project business, to project
estimates for long-term major projects, assumptions used in
impairment testing, valuation of accounts receivables and
inventories, determining the lease term applied in the lease
accounting and recognition of provisions and uncertain tax
positions.
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KONE ANNUAL REVIEW 2021View entire presentation