Basic information on the Group

Alma Media is a media company focusing on digital services and publishing. In addition to news content, the Group’s products provide useful information related to lifestyle, career and business development. Alma Media builds sustainable growth for its customers by utilising the opportunities of digitality, including information services, system and expert services and advertising solutions. The services of Alma Media have expanded from Finland to the Nordic countries, the Baltics and Central Europe. The Group’s parent company Alma Media Plc is a Finnish public company established under Finnish law, domiciled in Helsinki at Alvar Aallon katu 3 C, PL 140, FI-00101 Helsinki. 


A copy of the consolidated financial statements is available online at www.almamedia.fi or from the parent company head office.


The Board of Directors approved the financial statements for disclosure on 9 February 2017. According to the Finnish Limited Liability Companies Act, shareholders have the opportunity to approve or reject the financial statements at the General Meeting of Shareholders held after publication. It is also possible to amend the financial statements at the General Meeting of Shareholders.


The figures in the financial statements are independently rounded.

Accounting principles

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards, IFRS. The IAS and IFRS standards and SIC and IFRIC interpretations in effect on 31 December 2016 have been applied. International Financial Reporting Standards refer to the standards and their interpretations approved for application in the EU in accordance with the procedure stipulated in EU regulation (EU) no 1606/2002 and embodied in Finnish accounting legislation and the statutes enacted under it. The notes to the consolidated financial statements also comply with Finnish accounting and company legislation.


The Group adopted IFRS accounting principles during 2005 and in this connection applied IFRS 1 (First-time adoption), the transition date being 1 January 2004.


The consolidated financial statements are based on the purchase method of accounting unless otherwise specified in the accounting principles below. Figures in the tables in the financial statements are presented in thousands of euros.


The Group’s parent company, Alma Media Corporation (corporate ID code FI19447574, called Almanova Corporation until 7 November 2005) was established on 27 January 2005. The company acquired the shares of the previous Alma Media Corporation (corporate ID code FI14495809) during 2005. The acquisition has been treated in the consolidated accounts as a reverse acquisition based on IFRS 3. This means that the acquiring company was the old Alma Media Corporation and the company being acquired was the Group’s current legal parent company, Almanova Corporation. The net fair value of the assets, liabilities and contingent liabilities on the acquisition date did not differ from their carrying values in the company’s accounts.  The acquisition cost was equivalent to the net fair value of the assets, liabilities and contingent liabilities and therefore no goodwill was created by the acquisition. The accounting principles adopted for the reverse acquisition apply only to the consolidated financial statements.


Impact of standards adopted during 2016


The Group has adopted the following new standards and interpretations from 1 January 2016 onwards:


IAS 27  Separate Financial Statements amendment Equity Method in Separate Financial Statements. The amendment allows entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements, which has been a local requirement in certain countries. This allows more entities than before to prepare their separate financial statements under IFRS. The amendment to the standard had no effect on the consolidated financial statements.


IAS 16   Property, Plant and Equipment and IAS 41 Agriculture amendment Bearer Plants. These amendments allow biological assets that meet the definition of a bearer plant to be alternatively recognised at acquisition cost, when previously the standard required that they be recognised at fair value. However, the produce growing on bearer plants will continue to be measured at fair value less costs to sell under IAS 41. The amendments had no effect on the consolidated financial statements.


IAS 16    Property, Plant and Equipment and IAS 38 Intangible Assets amendment, Clarification of Acceptable Methods of Depreciation and Amortisation. The amendment specifies that the revenue-based method cannot be used to amortise intangible assets.  As an exception, amortisation of intangible assets can only be based on revenue if there is a very high degree of correlation between the revenue and the decrease in the economic value of the intangible asset. Nor can the revenue-based method be used to amortise property, plant and equipment. The amendments had no effect on the consolidated financial statements.


IFRS 11   Joint Arrangements amendment Accounting for Acquisitions of Interests in Joint Operations. The amendment requires the use of business combination accounting for the acquisition of an interest in a joint operation that constitutes a business. The amendment to the standard had no effect on the consolidated financial statements.


IAS 1       Presentation of Financial Statements: Disclosure Initiative. The amendments clarify the IAS 1 guidelines related to materiality, combining income statement and balance sheet items, the presentation of sub-headings, and the structure and accounting policies of financial statements. The amendment to the standard had no material effect on the consolidated financial statements.


IFRS 10    Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures amendment Investment Entities: Clarifications to the application of the consolidation exception. The amendments clarify concessions on the requirement to prepare consolidated financial statements in situations in which the group includes investment entities. The amendments also provide relief to investors that are not investment entities in the accounting treatment of associates and joint ventures that themselves are investment entities. The amendments had no effect on the consolidated financial statements.

Annual Improvements to IFRSs 2012–2014. Through the Annual Improvements procedure, small and less urgent amendments to the standards are collected and implemented together once a year. Their impacts vary standard by standard, but they have not had a material effect on the consolidated financial statements.

New and amended standards and interpretations to be applied in future periods

IASB has published the following new or amended standards and interpretations that the Group has not yet applied. The Group will begin applying them starting from the effective date of each standard and interpretation or, if the date of entry into effect is not the first day of the financial year, the Group will apply the standard or interpretation starting from the beginning of the next financial year:


IFRS 15  Revenue from Contracts with Customers (effective for financial periods beginning on or after 1 January 2018). The new standard establishes a five-stage framework for recognising revenue from contracts with customers and replaces existing revenue guidance, including IAS 18, IAS 11 and the related interpretations. Revenue can be recognised over time or at a specific time, with the central criterion being the transfer of control. The standard will also expand the notes presented with financial statements.


During the financial year 2016, the Group established a separate project to assess the effects of the standard. The project has reviewed the revenue recognition processes and accrual principles used in the different invoicing systems and accounting of the Group’s businesses, comparing the present situation to the requirements of the new standard. At the same time, the revenue recognition process has been made more automated. As a result, a change was made in 2016 to the recognition of revenue in Alma Career Oy. The change and its effect is described in Note 1.2. The project and the assessment of the effects of the standard will continue in the financial year 2017.


IFRS 9    Financial Instruments and amendments thereto (effective for financial periods beginning on or after 1 January 2018). The new standard replaces the existing IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 will change the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets. The classification and measurement of financial liabilities largely correspond to the current guidance in IAS 39. With regard to hedging, three hedging calculation types will remain in effect. More risk positions than before can be included in hedge accounting, and the principles regarding hedge accounting have been made more consistent with risk management. The Group is assessing the potential effects of the standard. The standard has not yet been approved for application in the EU.


IFRS 16  Leases (effective for financial periods beginning on or after 1 January 2019). IFRS 16 was issued in January 2016. As a result of the new standard, nearly all leases will be recognised in the balance sheet, as operating leases and finance leases will no longer be differentiated between. Under the new standard, a right-of-use asset is recognised, along with a financial liability representing the obligation to make future lease payments. The only exceptions are short-term leases and leases of low-value assets. Lessor accounting will not be subject to significant changes. The Group is assessing the effects of the standard’s implementation. The standard has not yet been approved for application in the EU.


IAS 12    Income Taxes amendment Recognition of Deferred Tax Assets for Unrealised Losses (effective for financial periods beginning on or after 1 January 2017). Amendments were made to IAS 12 in January 2016 to clarify the recognition of deferred taxes when an asset is measured at fair value and the fair value is lower than the taxable value of the asset in question. The amendment is not expected to have a material effect on the consolidated financial statements. The amendments have not yet been approved for application in the EU.


IAS 7      Statement of Cash Flows amendment Disclosure Initiative (effective for financial periods beginning on or after 1 January 2017). Under the amended standard, entities must disclose changes in liabilities arising from financing activities. This covers changes from financing cash flows (such as taking out and repaying loans) as well as non-cash flow changes, such as acquisitions, disposals, accrued interest and unrealised changes in foreign exchange rates. The Group is assessing the potential effects of the amendments. The amendments have not yet been approved for application in the EU.


IFRS 4    Insurance Contracts amendment (effective for financial periods beginning on or after 1 January 2018). Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts. The amendment is not expected to have an effect on the consolidated financial statements. The amendments have not yet been approved for application in the EU.


IFRS 2    Share-based Payments (effective for financial periods beginning on or after 1 January 2018). Clarifications to the classification and measurement of share-based payment transactions. The amendment is not expected to have a material effect on the consolidated financial statements. The amendments have not yet been approved for application in the EU.

Comparability of consolidated financial statements

The financial years 2016 and 2015 are comparable. The company has no discontinued operations to report in the financial periods 2016 and 2015. The Talentum Group acquired in November 2015 has had an effect on the increase in the income and expenses in the consolidated income statement.

Translation of items denominated in foreign currencies

Figures in the consolidated financial statements are shown in euro, the euro being the functional and presentation currency of the parent company. Foreign currency items are entered in euro at the rates prevailing at the transaction date.  Monetary foreign currency items are translated into euro using the rates prevailing at the balance sheet date. Non-monetary foreign currency items are measured at their fair value and translated into euro using the rates prevailing at the balance sheet date. In other respects non-monetary items are measured at the rates prevailing at the transaction date. Exchange rate differences arising from sales and purchases are treated as additions or subtractions respectively in the statement of comprehensive income. Exchange rate differences related to loans and loan receivables are taken to other finance income and expenses in the profit or loss for the period

The income statements of foreign Group subsidiaries are translated into euro using the weighted average rates during the period, and their balance sheets at the rates prevailing on the balance sheet date. Goodwill arising from the acquisition of foreign companies is treated as assets and liabilities of the foreign units in question and translated into euro at the rates prevailing on the balance sheet date. Translation differences arising from the consolidation of foreign subsidiaries and associated companies are entered under shareholders’ equity. Exchange differences arising on a monetary item that forms part of the reporting entity’s net investment in the foreign operation shall be recognised in the balance sheet and reclassified from equity to profit or loss on disposal of the net investment.

Assets available for sale and discontinued operations

Assets available for sale, and the assets related to a discontinued operation that are classified as available for sale, are measured at the lower of their book value or their fair value less the costs arising from their sale.  The Group does not have assets classified under assets available for sale in the financial statements for 2016 or 2015.

Operating profit and EBITDA

IAS 1 Presentation of Financial Statements does not include a definition of operating profit or gross margin. Gross margin is the net amount formed when other operating profit is added to net sales, and material and service procurement costs adjusted for the change in inventories of finished and unfinished products, the costs arising from employee benefits and other operating expenses are subtracted from the total. Operating profit is the net amount formed when other operating profit is added to net sales, and the following items are then subtracted from the total: material and service procurement costs adjusted for the change in inventories of finished and unfinished products; the costs arising from employee benefits; depreciation, amortisation and impairment costs; and other operating expenses. All other items in the profit or loss not mentioned above are shown under operating profit. Exchange rate differences and changes in the fair value of derivative contracts are included in operating profit if they arise on items related to the company’s normal business operations; otherwise they are recognised in financial items.

Adjusted items

Adjusted items are income or expense arising from non-recurring or rare events. Gains or losses from the sale or discontinuation of business operations or assets, gains or losses from restructuring business operations as well as impairment losses of goodwill and other assets are recognised by the Group as adjusted items. Adjusted items are recognised in the profit and loss statement within the corresponding income or expense group. Adjusted items are described in the Report by the Board of Directors.

Accounting principles requiring management’s judgement and key sources of estimation uncertainty

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions which may differ from actual results in the future. Management is also required to use its discretion as to the application of the accounting principles used to prepare the statements.

Accounting principles requiring management’s judgement

The management of the Group makes judgement-based decisions pertaining to the selection and application of the accounting principles used in the financial statements. This particularly applies in cases where the existing IFRS regulations allow for alternative methods of recognition, measurement and presentation. A significant area in which the management has exercised this type of judgement is related to the Group’s lease agreements. The Group has significant lease agreements for its business premises. Based on assessment of the terms of the agreements, the Group has determined that it does not bear any significant rewards and risks incidental to the ownership of the premises and therefore the agreements are by nature operating lease agreements.

Key sources of estimation uncertainty

The estimates made in conjunction with preparing the financial statements are based on the management’s best assessments on the reporting period end date. The estimates are based on prior experience, as well as future assumptions that are considered to be the most likely on the balance sheet date with regard to issues such as the expected development of the Group’s economic operating environment in terms of sales and cost levels. The Group monitors the realisation of estimates and assumptions, as well as changes in the underlying factors, on a regular basis in cooperation with the business units, using both internal and external sources of information. Any changes to these estimates and assumptions are entered in the accounts for the period in which the estimate or assumption is adjusted and for all periods thereafter.

Future assumptions and key sources of uncertainty related to estimates made on the balance sheet date that involve a significant risk of changes to the book values of the Group’s assets and liabilities during the following financial year are presented below. The Group’s management has considered these components of the financial statements to be the most relevant in this regard, as they involve the most complicated accounting policies from the Group’s perspective and their application requires the most extensive application of significant estimates and assumptions—for example, in the valuation of assets. In addition, the effects of potential changes to the assumptions and estimates used in these components of the financial statements are estimated to be the largest.

The determination of the fair value of intangible assets in conjunction with business combinations is based on the management’s estimate of the cash flows related to the assets in question. The determination of the fair value of liabilities related to contingent considerations arising from business combinations are based on the management’s estimate. The key variables in the change in fair value of contingent considerations are estimates of future operating profit.

Impairment tests: The Group tests goodwill and intangible assets with an indefinite useful life for impairment annually and reviews any indications of impairment in the manner described above. The amounts recoverable from cash-generating units are recognised based on calculations of their fair value. The preparation of these calculations requires the use of estimates. The estimates and assumptions used to test major goodwill items for impairment, and the sensitivity of changes in these factors with respect to goodwill testing is described in more detail in the note which specifies goodwill.

Useful lives: Estimating useful lives used to calculate depreciation and amortisation also requires management to estimate the useful lives of these assets. The useful lives used for each type of asset are listed above under Property, Plant and Equipment and Intangible Assets.

Other estimates: Other management estimates relate mainly to other assets, such as the current nature of receivables and capitalised R&D costs, to tax risks, to determining pension obligations and to the utilisation of tax assets against future taxable income.

Events subsequent to the closing of the accounts

The period during which matters affecting the financial statements are taken into account is the period from the closing of the accounts to the release of the statements. The release date is the day on which the Financial Statements Bulletin will be published. Events occurring during the period referred to above are examined to determine whether they do or do not render it necessary to correct the information in the financial statements.

Information in the financial statements is corrected in the case of events that provide additional insight into the situation prevailing on the balance sheet date. Events of this nature include, for example, information received after the closing of the accounts indicating that the value of an asset had already been reduced on the balance sheet date.