ELECTROLUX: change in accounting practice

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Electrolux-Global-Headquarter-Stockholm-002[1]

As communicated in a press release, Electrolux announced that it will discontinue the accounting practice of items affecting comparability.
Over the years, the company has implemented restructuring programs for the purpose of optimizing its manufacturing footprint and reducing costs to improve competitiveness. Restructuring charges related to these programs have been presented separately as items affecting comparability in the income statement. Operating income by business area and selected key ratios have been reported excluding these costs. These major restructuring programs are now in the final stage and, as previously communicated, Electrolux will as of 2015 discontinue this accounting practice. Although there will likely be restructuring programs going forward, these are expected to be much less extensive.
For comparability purposes, quarterly and yearly figures for 2014 have been restated. While this change in accounting practice has no impact on the Group’s operating income, the restated gross operating income has been reduced. Costs previously recognized as items affecting comparability in the amount of 1.2 billion Sek have been allocated to costs of goods sold, selling expenses and/or administrative expenses. The restatement of operating income by business area has mainly affected operating income for Major Appliances EMEA, which includes restructuring costs in the net amount of 1.2 billion Sek for 2014. The restatement has no impact on the balance sheet or cash flow. Although the practice of recognizing items affecting comparability will be discontinued, it is the intention of Electrolux to clearly comment on any potential future restructuring costs or other material transactions of non-recurring nature.