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G1 Significant accounting principles – assessments and assumptions for accounting purposes

The consolidated financial statements comprise Sandvik AB, corporate registration number 556000–3468, (the Parent Company) and all its subsidiaries, jointly the Group with registered office in Stockholm, Sweden. The address for the head quarter is Box 510, 101 30 Stockholm. The Group also includes the share of investments in associated companies.

The Parent Company’s functional currency is Swedish kronor (SEK), which is also the reporting currency of the Group. Accordingly, the financial statements are presented in SEK. All amounts are in million SEK unless otherwise stated. Amounts in tables and calculations in the financial statements and notes do not always agree exactly with the totals due to rounding.

All notes are presented for continuing operations unless otherwise stated.

Accounting principles are presented in this note or in connection to the note of which they aim to describe.

§ Accounting principles

The symbol and heading show where the accounting principles are described in each note.

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB) as endorsed by the EU. In addition, the recommendation RFR 1 Supplementary Accounting Rules for Groups, issued by the Swedish Corporate Reporting Board, has been applied.

The Parent Company has applied the same accounting principles as those applied in the consolidated financial statements except as set out in note P1 in the section “Accounting principles, Parent Company".

The financial statements are presented on pages 40–136 in the printed Annual Report. The Parent Company’s Annual Report and the consolidated financial statements were approved for issuance by the Board of Directors on March 11, 2024. The Group’s and the Parent Company’s income statements and balance sheets are subject to adoption at the Annual General Meeting on April 29, 2024.

Basis of measurement

Assets and liabilities are stated on a historical cost basis except for certain financial assets and liabilities, which are stated at their fair value. Financial assets and liabilities measured at fair value are comprised of derivative instruments and plan assets in the defined benefit plans. Receivables and liabilities and items of income and expense are offset only when required or expressly permitted in an accounting standard.

Events after the balance sheet date refer to both favorable and unfavorable events that have occurred after the balance sheet date but before the date the financial statements were authorized for issue by the Board of Directors. Significant non-adjusting events, that is, events indicative of conditions that arose after the balance sheet date, are disclosed in the financial statements. Only adjusting events, that is, those that provide evidence of conditions that existed at the balance sheet date, have been considered in the final establishment of the financial statements. The most significant accounting policies for the Group, as set out below and in the notes, have been applied consistently to all periods presented in these consolidated financial statements except as specifically described. Moreover, the Group’s accounting policies have been consistently applied in the Group reporting by all members of the Group and in the Group reporting of associated companies, where necessary, by adaptation to Group policies.

Basis of consolidation

The consolidated accounts are prepared in accordance with the Group’s accounting principles and include the accounts of the Parent Company and all Group companies.

Foreign currency
Financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair-value adjustments arising on consolidation, are translated from the foreign operation’s functional currency to the Group’s reporting currency, SEK, at foreign exchange rates prevailing at the balance sheet date. Revenues and expenses of foreign operations are translated to SEK at average rates that approximate the foreign exchange rates prevailing at each of the transaction dates. Translation differences arising from the translation of the net investment in foreign operations are recognized in other comprehensive income and are accumulated in a separate component of equity, a translation reserve. If the foreign operation is divested, the accumulated translation differences attributable to the divested foreign operation is reclassified from equity to profit or loss for the year as a reclassification adjustment at the date on which the profit or loss of the divestment is recognized. For cases in which divestments made include a residual controlling influence, the proportionate share of accumulated translation differences from other comprehensive income is transferred to non-controlling interests.

Changes in accounting policies 2023

IASB has published amendments of standards that are effective 2023. These have not had any material impact on the financial statements.

IAS 1 Disclosure of material accounting policy information

A company shall disclose of material accounting policies instead of significant accounting policies. The amendment is effective from January 1, 2023.

IAS 12 Deferred tax

A company shall recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences, and will require the recognition of additional deferred tax assets and liabilities. The amendment is effective from January 1, 2023.

IAS 12 Pillar II

Sandvik applies the exception to recognizing and disclosing information about deferred tax assets and liabilities realted to Pillar II income taxes, as provided in the amendments to IAS 12 issued in May 2023. The amendment is effective immediately.

Changes in accounting policies 2024 or later

A number of new or amended accounting standards and interpretations have been published and are effective from 2024 or later. None of these are considered to have a material impact on the financial statements.

IAS 1 Disclosure of Supplier Finance Arrangements (SFAs)

The amendment requires specific disclosures regarding supplier finance arrangements. The objective of the new disclosures is to provide information about SFAs that enables investors to assess the effects on an entity”s liabilities, cash flows and the exposure to liquidity risk.

Critical accounting estimates and judgments
Key sources of estimation uncertainty

In order to prepare the financial statements, management and the Board make various judgments and estimates that can affect the amounts recognized in the financial statements for assets, liabilities, revenues and expenses as well as information in general, including contingent liabilities. The judgments and estimates discussed in notes where applicable are those deemed to be most important for an understanding of the financial statements, considering the level of significant estimations and uncertainty. The conditions under which Sandvik operates are gradually changing, meaning that the judgments also change.

! Critical estimates and judgments

The symbol and heading show where the estimates and judgments are described in each separate note. The notes and critical estimates and judgments refers to:


Critical estimates and judgments


Impairment tests of goodwill and impairment tests of other non-current assets


Impairment tests of other non-current assets


Post employment benefits




Allocation of goodwill and other surplus values