Annual Report 2019-2020

45 NOTES 1. GENERAL INFORMATION Efling trade-union was founded in December 1998 and began it’s operations at year end 1999. Members are around 28.000. The company’s head office is at Guðrúnartúni 1 in Reykjavík. The office in the south region is at Breiðamörk 19 í Hveragerði. The main role of Efling trade-union is to work on collective wage agreements and interpret them in favor of the members also to establised rights in funds for members and to defend their rights in collective agreements and labor disputes, def- end their rights for accident- and sickness benefits, recreational- and in educational matters. Efling trade-union provides its members with diverse services in these areas. 2. ACCOUNTING POLICIES Basis of preparation The Consolidated financial statements of Efling trade-union for the year 2019 are prepared in accordance with Financial Statement act no. 3/2006 in Iceland. The Consolidated Financial Statement is prepared in Icelandic króna. The Principal Accounting Policies adopted are set out below. Estimates and decisions At the making of the annual report, the management, in accordance with laws on Financial Statements, need to make decisions, estimate and draw conclusions which affect assets and liabilities at the reporting date, information in the notes and income and cost. All conclusions and estimates are based on knowledge and experience and other relevant factors and make up the basis for decisions made on book value of assets and liabilities which cannot be ascertained by any other mean. Changes to accounting estimates are recognized in the period they incur. Revenue recognition Union fees are entered in the income statement when payment is made on the basis of payment report from Gildi pension fund, which is in charge of collecting of the Eflings’s union fees. Lease income from summerhouses is accounted for as revenue when payment is received. Interest income is recognized for the relevant period in accordance with applicable principal and interest rate. Borrowing costs All borrowing costs are recognized in the period they incur. Borrowing cost are capitalized and depreciated during the loan. Property and equipment Property and equipment are recognized as asset when it is probable that future economic benefit associatet with the asset will flow to Efling-trade union and the cost of the asset can be measured in a reliable manner. Property and equipment which qualifies for recognition as an asset is initially measured at cost. The cost of a property and equipment comprises its purchase price and any directly attributable cost of bringing the asset to working condition for its intended use. The depreciable amount of the asset is allocated on a fixed annual percentage of the historical cost over its useful life, less residual value. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. Recreational fund‘s ownership in joint property of summerhouses is calculated as a share in net assets of the summer- houses at year end 2018. Summerhouses are valued to the current property valuation price at year end 2019. Power station at Hvammi is valued at the purchase price less depreciation. Depreciation is based on 10 years of service life. Taxation Efling-trade union is a tax exempt and does not pay any income tax but pays even though a capital income tax. E F L I N G A N N U A L R E P O R T 2 0 1 9 – 2 0 2 0