The consolidated accounts comprise the parent company Peab AB, its subsidiaries and joint arrangements. Peab AB is a Swedish registered limited company domiciled in Båstad. Peab AB’s shares are registered on Nasdaq Stockholm. Its headquarters are located at Margretetorpsvägen 84, 269 73 Förslöv, Sweden.

Compliance with standards and legislation

The consolidated accounts have been drawn up in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) which have been adopted by EU. In addition, the Council for Sustainability and Financial Reporting Board recommendation RFR 1 Supplementary accounting rules for groups has also been applied.

The Annual Report and the consolidated accounts have been approved of by the Board of Directors and Chief Executive Officer for publication on March 28, 2025. The Group consolidated income statement and balance sheet and the parent company income statement and balance sheet will be presented for adoption by the AGM on May 6, 2025.

The Group describes the most important accounting principles together with each note in order to provide greater comprehension of the respective accounting area. The Group focuses on describing the accounting choices that it has made within the framework for the applicable IFRS standard and avoids repeating paragraph text from the standard unless it is considered material to understanding the contents of the note. See the table below to see in which note the respective accounting principle can be found, along with the applicable IFRS standard that is considered to have a material impact.

Valuation basis

Assets and liabilities are recognized at historical acquisition values except for certain financial assets and liabilities which are assessed at fair value. Financial assets and liabilities valued at fair value consist of derivatives, contingent considerations and shares and holdings that are not subsidiaries or joint arrangements.

Classification

Fixed assets consist of amounts which are expected to be recovered or paid more than twelve months after the balance sheet date. Long-term liabilities consist of amounts which are due for payment more than twelve months after the balance sheet date as well as other amounts the company has an unconditional right to defer payment on until a point in time more than twelve months after the balance sheet date. Other assets and liabilities are recognized as current assets and current liabilities. Inventories in the form of project and development properties with a normal operating cycle that is longer than twelve months are also recognized as current assets.

Liabilities attributable to our own developed property projects with a normal operating cycle that is longer than twelve months are recognized as current assets.

Consolidation principles

The consolidated accounts comprise the parent company Peab AB, its subsidiaries and joint arrangements. In addition, the consolidated accounts also comprise Swedish tenant-owner associations and our own housing developments, Norwegian condominiums and share housing and Finnish residential limited companies up to the time the final homebuyers take over their apartments.

Functional currency and translation of foreign currency

The parent company’s functional currency is the Swedish krona, which is also the currency in which the accounts of the parent company and the Group are reported. Unless otherwise indicated all amounts are rounded off to the nearest million.

Transactions in foreign currency

Transactions in foreign currency are translated to the functional currency at the exchange rate on the transaction date. Exchange rate differences referring to operations are net recognized in other operating income or other operating costs. Exchange rate differences referring to receivables and liabilities are net recognized as financial income or financial costs.

Foreign company financial reports

Assets and liabilities in foreign entities including goodwill and other Group deficit and surplus values are translated from the foreign company’s functional currency to the Group’s reporting currency, Swedish kronor, at the exchange rate on balance sheet day. Revenue and costs in a foreign entity are translated to Swedish kronor at an average rate that approximates the rates on the respective transaction dates. Translation differences arising when translating the currency of foreign companies are recognized in other comprehensive income and are accumulated in a separate component in equity as a translation reserve.

Net investment in a foreign company

Translation differences arising from the translation of a foreign net investment are recognized via other comprehensive income in the translation reserve in equity. Translation differences also comprise exchange rate differences from loans which form a part of the parent company’s investment in foreign subsidiaries (so-called extended investment). When a foreign subsidiary is divested, the accumulated translation differences attributable to the company are reclassified from equity to profit/loss for the year.

Property

Group property holdings are recognized as follows:

• Operations property among fixed assets, see note 16. This refers to property used in Group operations and consists of office and production buildings and other operations property.
• Investment property among fixed assets, see note 17.
• Project and development properties as inventory among current assets, see note 22.

Amended accounting principles

Changed IFRSs applied as of 2024

Group accounting principles are unchanged compared to the annual accounts for 2023. The amended IFRSs applied as of 2024 have not had any material effect on Group accounting.

Coming changes in accounting principles

New IFRSs and interpretations that have not yet been applied

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024 the IASB issued IFRS 18 which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation in the income statement, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses in the income statement into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new.

It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses and includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements (PFS) and the notes.

In addition, narrow scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality in classification of cash flows from dividends and interest. As a result of this there are consequential amendments to several other standards.

IFRS 18 and the amendments to the other standards apply for reporting periods beginning on or after January 1, 2027 but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively.

The Group is currently working to identify all the consequences the amendments will have on the primary financial statements and notes to the financial statements.

Other

New and amended IFRSs together with interpretations that have been adopted by IASB are not expected to have any material effect on Group accounting.

Accounting principles	Note		IFRS-standard
Revenue	3	Revenue	IFRS 15, IFRS 16
Operating segments	4	Operating segments	IFRS 8
Business combinations	5	Business combinations	IFRS 3
Remuneration to employees	9	Employees, personnel costs and remuneration to senior officers	IAS 19
Share-related remuneration	9	Employees, personnel costs and remuneration to senior officers	IFRS 2
Borrowing costs	12	Net financial income/expenses	IAS 23
Taxes	13	Taxes	IAS 12
Intangible assets	15	Intangible assets	IAS 38
Tangible assets	16	Tangible assets	IAS 16
Investment property	17	Investment property	IAS 40
Information on participations in other companies	18	Participation in joint ventures	IFRS 12
Information on participations in other companies	19	Joint operations	IFRS 12
Inventories	22	Project and development properties	IAS 2
Inventories	23	Inventories	IAS 2
Leasing agreement	28	Leasing	IFRS 16
Provisions	29	Provisions	IAS 37
Financial instruments	32	Classification and valuation of financial assets and liabilities	IFRS 9
Financial instruments	33	Financial risks and Finance Policy	IFRS 9
Contingent liabilities	35	Pledged assets, contingent liabilities and contingent assets	IAS 37