In November 2022, the Administrative Court of Appeal announced its ruling that JM must consolidate tenant-owner associations in current production in its consolidated financial statements according to IFRS. JM chose to apply for leave to appeal with the Supreme Administrative Court. The decision by the Supreme Administrative Court to not grant leave to appeal thus closes the matter, and the ruling by the Administrative Court of Appeal becomes legally binding. Under this ruling, the tenant-owner associations formed through JM’s residential development must be consolidated in JM’s consolidated financial statements according to IFRS.

As of fiscal year 2023, JM, according to IFRS, consolidates ongoing projects with Swedish tenant-owner associations during the production phase up until the point in time that the home buyers of the residential units take over occupancy. Accordingly, JM recognizes the projects in the balance sheet as work in progress and interest-bearing liabilities. Revenue and expenses for the projects are recognized as the home buyers take over occupancy of the residential units. The changed accounting principle entails that JM will recognize all residential projects that are developed in-house in Sweden, Norway and Finland according to the completed contract method. Revenue from residential development through tenant-owner associations in Sweden was previously recognized over time.

To provide a correct overview of JM’s earnings trend over time with regard to residential development through tenant-owner associations, JM will continue to present segment reporting where revenue in these projects is recognized in accordance with the percentage of completion method. The reporting of financial key ratios will also take these conditions into consideration, which is in line with JM’s internal governance model. Neither JM’s risk profile nor existing financing agreements are impacted by this accounting change.

The changed accounting principle for legal consolidation according to IFRS has been applied retroactively from January 1, 2022. The tables attached present the restatement of the new accounting principles for segment reporting and legal consolidation per quarter in 2022 and per opening balance on January 1, 2023.