(This unaudited interim report complies with
International Accounting Standards IAS 34.)


Highlights of first quarter, 2005
Net sales                    EUR 131.8 million    (140.6)
Operating profit               EUR 8.9 million     (12.8)
Profit before taxes           EUR 13.0 million     (14.8)
Operating profit from                                    
industrial operations          EUR 9.5 million     (13.3)
Share of profits from the                                
associated company Wärtsilä    EUR 6.2 million      (3.9)
The School, Office and Craft product group in the US has
been strengthened by the acquisition of a manufacturer of
branded scissors.


EUR million                             Q1/2005  Q1/2004    2004
Net sales                                 131.8    140.6   566.3
Operating profit                            8.9     12.8    52.1
Operating profit, %                       6.8 %    9.1 %   9.2 %
Share of profits from associated company    6.2      3.9    26.7
Profit before taxes                        13.0     14.8    75.0
Earnings per share (undiluted), EUR        0.13     0.16    0.71
Operational cash flow                     -17.4      5.7    76.4

The wholly-owned industrial operations of Fiskars
Corporation continue to be concentrated in North America,
where some 54% (56%) of the net sales for the first
quarter was generated. A slow start in seasonal sales led
to a decreased operating profit of EUR 9.5 million (13.3)
from the corporation’s industrial operations. Profits
from the associated company Wärtsilä developed favorably
and Fiskars’ share was EUR 6.2 million (3.9). The
earnings per share for the review period was EUR 0.13

This interim report is the first report publised by
Fiskars Corporation in accordance with International
Financial Reporting Standards (IFRS) and IAS 34. As of
January 1, 2005, Fiskars complies with the IAS 39
Financial Instruments standard. The effects of adopting
this standard on the equity of the starting balance sheet
have been presented in a separate statement of changes in
consolidated equity. The effects of adoptation are minor
as what comes to Fiskars’ own operations. Previously
reported figures and the IFRS-compliant figures for the
first quarter are also reconciled in separate appendices.



Fiskars Brands net sales were at EUR 121.1 million
(130.8), a decrease of some 7%. The operating profit was
EUR 8.5 million or 7.0% of sales (12.3 and 9.4%). Most of
the decrease in net sales was in the US, where sales was
12% lower compared to the corresponding quarter in 2004.
In other markets sales matched last year’s levels.

Sales during the first quarter started generally more
slowly than in the previous year and also later than
usual as cold weather affected adversely sales of garden
tools. Sales of outdoor recreation products didn’t reach
last year’s levels. The development of operating profits
was further influenced by increases in the cost of raw
materials such as steel and resin. To ensure competitive
prices for their products, Fiskars is using more
subcontracting and streamlining production. For instance,
the European manufacture of knives has been focused in
Italy, while the production capacity for garden tools has
been increased in Billnäs, Finland.

Sales of the School, Office and Crafts products (FISKARS)
were slightly less than for the first quarter last year.
This product group now invests into its marketing and is
developing the subcontracting of its production. At the
beginning of 2005, its administration was centralized to
the US headquarters of the company. In March, Fiskars
Brands, Inc. bought the manufacture and marketing of
GINGHER branded scissors.

Overall, sales of the Garden and Outdoor Living products
sold under the FISKARS brand were satisfactory but the
slow start of the spring selling season especially
affected flowerpots and floor mats included in this group
and sold under other brand names. The results for the
first quarter were weakened by the tough price
competition in these products and the rapid rise in the
cost of raw materials.

The largest customer for the product group Outdoor
Recreation (GERBER) changed their marketing strategy for
campaign products, which led to a decrease in sales.
Sales to different government purchase organizations in
the United States, which increased rapidly last year,
were lower this year.

Sales of Consumer Electronics (POWER SENTRY and NEWPOINT)
developed favorably. The company’s products are mainly
after-sales products to consumer electronics for domestic
use, and the market is growing as home electronics become
more varied and digital. New products have been
successfully introduced in the marketplace and new
distribution networks taken over.

Fiskars net sales in Europe matched last year’s levels.
Sales of snow tools did not reach the levels anticipated
for the Nordic countries, and cold weather delayed the
start of the spring selling season in Central Europe.
However, new products clearly increased net sales in the
United Kingdom and France. Sales of flowerpots continued
to fall in Germany. The markets for Housewares remained
at last year’s level, and new products have been launched
to further develop the group. Apart from scissors, sales
of School, Office and Craft products are limited in
Europe. At the beginning of 2005 a push was begun to
develop the European markets, using product and marketing
concepts familiar from the US.


The Inha Works EUR 8.6 million (7.6) net sales showed a
12% increase over those for the first quarter last year.
BUSTER boats had record-breaking volume of orders, and
the increased production capacity is in full use. The
midsize and large boat models are now painted both inside
and out, and these new boats with their improved finish
were well received on the market. The production line for
painting the boats was inaugurated in February and is
working as planned.

The sales of forged products developed favorably. In the
hinge market, price competition is getting tougher due to
the availability of imports from low-cost countries.

The operating profit of Inha Works was EUR 1.0 million
(1.0). Inha Works is pushing to minimize the effects of
increased raw material costs and other manufacturing
costs by streamlining production and pressing up
competition between suppliers.


The net sales and profitability of the Real Estate
operations reached the same levels as last year.
Variations in price-level for standing timber affect the
value of growing stock and thereby the results of the
operations. Price-level for standing timber has risen
slightly since the beginning of the year.


Fiskars’ share of this associated company’s results for
the first quarter was EUR 6.2 million (3.9). Fiskars
share of Wärtsilä is 20.5% of shares and 28.1% of votes.
At the end of March, the book value of the shares was EUR
238.3 million (187.6), with their market value being EUR
387 million. The dividend decided at the Wärtsilä Annual
General Meeting held in March has been booked as short-
term receivable and as dividend received from an
associated company reducing the book value of the
associated company.

As at January 1, 2005 Wärtsilä complies with the IAS 39
Financial Instruments standard. The impact of IAS 39 on
Wärtsilä’s equity also bears on Fiskars’ equity in
proportion to the Fiskars’ share in Wärtsilä. The effect
on Fiskars’ equity on the opening balance sheet as of
January 1, 2005 was EUR 37.8 million and the effect on
Fiskars’ equity on March 31 was EUR 29.6 million.


At the end of the first quarter, the total number of
corporate personnel was 3,559 (3,662). Since the
beginning of the year, the number of employees has
increased by 111. The increase in the period was evenly
and geographically spread across the industrial
operations, as production was increased in relation to
seasonal demand. The number of employees in Finland
increased from 915 at the end of 2004 to 947 at the end
of March.


The largest investment in the first months of 2005 was
the acquisition of the Gingher scissors operations in the
US. The purchase price was EUR 8.3 million. A further EUR
3.8 million was spent on other investments, mostly to
maintain the company’s production capacity. Total capital
expenditure during the first quarter was EUR 12.3 million


Results for continuing operations during this year’s
first quarter were EUR 10.4 million (12.0).

Taxes for the period have been calculated on the basis of
accrued results and current tax rates. Taxes of EUR 2.7
million (2.8) have been calculated for the first quarter.
The impact of the Syroco operations, divested in
September 2004, was EUR 0.5 million on the results for
last year’s first quarter.


The balance sheet total was EUR 763 million (735). Since
the beginning of the 2005 financial year, the total has
increased by EUR 80 million, around half of which due to
seasonal fluctuations. During the first quarter, the
company has prepared for the beginning of the sales
season, and inventories have increased by EUR 15 million
since the end of 2004. Also, as the season has begun,
trade receivables have increased by EUR 23 million.

Cash flow from operations was EUR –17.4 million (5.7) and
EUR 11.6 million (6.2) was invested. The increased
requirement of capital was financed through raising
interest-bearing net debt, which increased by some EUR 38
million from the beginning of the financial period to a
total of EUR 240 million (247).

In accordance with international financial reporting
standards, the EUR 45 million capital loan issued in
December 2004 is included in long-term interest bearing
debt. The dividend decided by the Annual General Meeting
has been deducted from shareholders’ equity and booked as
a short-term non-interest bearing debt.

The company’s financial situation and liquidity were
strong. The equity ratio was 46% at the end of the review
period (49% at the turn of the financial year). Net
gearing increased from 60% at year-end to 68%. The net
financing costs were EUR 2.1 million (1.9).


The corporate Board of Directors is authorized to acquire
the company’s own shares. The Board did not exercise this
authority during the first quarter. At March 31, 2005,
the company held a total of 127,512 of its shares of
series A and 420 shares of series K.


The Annual General Meeting of Fiskars Corporation held on
March 23, 2005 decided on a dividend payment of EUR 0.30
per share for A-shares and EUR 0.28 per share for K-
shares, in total EUR 22.8 million.

The meeting determined that the number of Board members
shall be seven. Mr. Göran J. Ehrnrooth, Mr. Mikael von
Frenckell, Mr. Gustaf Gripenberg, Mr. Olli Riikkala, Mr.
Paul Ehrnrooth, Ms. Ilona Ervasti-Vaintola and Mr.
Alexander Ehrnrooth were elected members of the Board.
Their term of membership will expire at the end of the
Annual General Meeting in 2006. Convening after the
Annual General Meeting, the Board elected Göran J.
Ehrnrooth its chairman.

KPMG Oy Ab was elected auditor.

The Annual General Meeting decided to authorize the Board
of Directors to acquire a maximum of 2,619,712 of the
company’s shares of series A and a maximum of 1,127,865
of series K within the period of one year from March 23,
2005. Within the same period, the Board was authorized to
sell a maximum of 2,747,224 of the company’s shares of
series A and a maximum of 1,128,285 shares of series K.


The price of Fiskars series A on the Helsinki Exchange at
the end of March was EUR 9.25 per share (EUR 7.90 at the
beginning of the year) and series K EUR 9.28 per share
(7.90). The market capitalization of the company’s shares
at the end of March was EUR 718 million.


The wholly-owned industrial businesses of Fiskars
Corporation are seasonal in nature and this year’s spring
season has not reached the level of the corresponding
season last year. This means the year-end profits of the
industrial operations are expected to remain somewhat
below the results for last year. The results of the whole
corporation are also strongly influenced by the profits
of its associated company Wärtsilä and the results of the
Real Estate Operations.

Heikki Allonen
President and CEO

1.   Figures for Interim Report
2.   Accounting principles according to IFRS


CONSOLIDATED                         1-3    1-3    chg   1-12
INCOME STATEMENT                    2005   2004      %   2004
                                    MEUR   MEUR          MEUR

NET SALES                          131.8  140.6     -6  566.3

Cost of goods sold                 -92.0  -96.2     -4 -388.8
GROSS PROFIT                        39.8   44.4    -10  177.5

Other income                         0.1    0.3    -74    3.6
Sales and marketing expenses       -16.7  -16.1      4  -63.5
Administration expenses            -12.8  -14.4    -11  -58.0
Other expenses                      -1.4   -1.4      2   -7.5
OPERATING PROFIT                     8.9   12.8    -31   52.1

Share of assoc.comp.result           6.2    3.9     60   26.7
Financial income and expenses       -2.1   -1.9     10   -3.8
PROFIT BEFORE TAXES                 13.0   14.8    -12   75.0

Taxes                               -2.7   -2.8     -4  -15.2
PROFIT FROM CONTINUING OPERATIONS   10.4   12.0    -14   59.8

Profit from discontinued operations         0.5          -5.3
PROFIT FOR THE PERIOD               10.4   12.5    -17   54.6

Earnings per share, euro            0.13   0.16          0.71
   continuing operations            0.13   0.16          0.77
   discontinued operations                 0.01         -0.07

Earnings per share is undiluted. The company has no open otion programs.

CURRENCY RATES                       1-3    1-3    chg   1-12
                                    2005   2004      %   2004

USD average rate (I/S)              1.31   1.25      5   1.24
USD end-of-period (B/S)             1.30   1.22      6   1.36

CONSOLIDATED BALANCE SHEET          3/05   3/04    chg  12/04
                                    MEUR   MEUR      %   MEUR

Tangible assets                    137.2  145.1     -5  133.1
Intangible assets                   41.8   38.8      8   34.7
Biological assets                   31.0   28.9      7   30.4
Shares in assoc.companies          238.3  187.6     27  219.1
Other investments                    5.6   24.5    -77    4.4
Deferred tax assets                 46.7   44.6      5   47.3
LONG-TERM TOTAL                    500.6  469.4      7  469.0

Inventories                        124.3  113.3     10  109.7
Financial assets                   138.2  119.1     16  104.8
CURRENT TOTAL                      262.4  232.4     13  214.5

Assets of a disposal group
held for sale                              33.5
ASSETS TOTAL                       763.0  735.2      4  683.5


Equity                             354.8  350.3      1  335.7

L/t interest bear.debt             157.8  144.6      9  146.5
Deferred tax liabilities            20.6   17.8     16   20.2
Other l/t non-int.bear.debt         19.3   19.9     -3   20.0
LONG-TERM TOTAL                    197.8  182.3      9  186.7

S/t interest bear.debt              88.6   97.3     -9   71.1
S/t non-interest bear.debt         121.8  100.8     21   90.0
CURRENT TOTAL                      210.4  198.1      6  161.1

Liabilities of a disposal
group held for sale                         4.6
EQUITY AND LIABILITIES TOTAL       763.0  735.2      4  683.5

KEYFIGURES                          3/05   3/04    chg  12/04
Equity/share, euro                  4.59   4.53      1   4.34
Equity ratio                         46%    48%           49%
Net gearing                          68%    70%           60%
Equity, meur                       354.8  350.3      1  335.7
Net interest-bear.debt, meur       240.0  246.6     -3  202.0
Average number of employees         3539   3652     -3   3567

STATEMENT OF CHANGES IN                   Share         Other
CONSOLIDATED EQUITY                Sharepremium    Own reser-Transl.Retain.
                                 capitalaccount shares    vesadjustm  earn.  Total
                                    MEUR   MEUR   MEUR   MEUR   MEUR   MEUR   MEUR
Jan.01,2004                         55.4   21.3   -0.6    0.0    0.0  278.6  354.6
Translation differences                                          0.8           0.8
Dividends                                                             -16.8  -16.8
Own shares, change                                -0.3                        -0.3
Other changes                                                   -0.6          -0.6
Net profit for the period                                              12.5   12.5
Mar.31,2004                         55.4   21.3   -0.9    0.0    0.3  274.3  350.3

Dec.31,2004                         77.5    0.0   -0.9    0.0  -10.4  269.5  335.7
Adoption of IAS 39
   Fiskars corporation                                   -0.3           0.4    0.1
   Associated company Wärtsilä                           37.8                 37.8
Jan.01,2005                         77.5    0.0   -0.9   37.5  -10.4  270.0  373.7
Translation differences                                          1.1           1.1
Dividends, booked as liability                                        -22.8  -22.8
Change in fair value reserve                              0.1                  0.1
Other changes in assoc. company                                        -7.7   -7.7
Net profit for the period                                              10.4   10.4
Mar.31,2005                         77.5    0.0   -0.9   37.6   -9.3  249.9  354.8

CONSOLIDATED STATEMENT               1-3    1-3   1-12
OF CASH FLOWS                       2005   2004   2004
                                    MEUR   MEUR   MEUR
From oper. activities              -17.4    5.7   76.4
From investm. activities           -11.6   -6.2    0.1
From financing                      19.9   -1.2  -78.0
Currency transaction adjustm.       -0.1    0.5    0.2
CHANGE IN CASH                      -9.2   -1.3   -1.3
Cash at beginning of period         15.6   16.8   16.8
CASH AT END OF PERIOD                6.4   15.5   15.5

SEGMENTINFORMATION                   1-3    1-3    chg   1-12
NET SALES                           2005   2004      %   2004
                                    MEUR   MEUR          MEUR
Fiskars Brands                     121.1  130.8     -7  528.0
Inha Works                           8.6    7.6     12   29.2
Real Estate                          2.8    2.7      4   11.7
Eliminations                        -0.7   -0.5     40   -2.6
CORPORATE TOTAL                    131.8  140.6     -6  566.3

Export from Finland                 18.9   17.8      6   56.2

SEGMENTINFORMATION                   1-3    1-3          1-12
RESULT                              2005   2004          2004
                                    MEUR   MEUR          MEUR
Fiskars Brands                       8.5   12.3          48.5
Inha Works                           1.0    1.0           3.6
Real Estate                          0.7    0.7           5.2
Eliminations and other oper.        -1.2   -1.1          -5.2
OPERATING PROFIT                     8.9   12.8          52.1
Share of net profit in Wärtsilä      6.2    3.9          26.7
Financial cost net                  -2.1   -1.9          -3.8
RESULT AFTER FINANCIAL ITEMS        13.0   14.8          75.0

SEGMENTINFORMATION                   1-3    1-3    chg   1-12
DEPRECIATION AND AMORTIZATION       2005   2004      %   2004
ACCORDING TO PLAN                   MEUR   MEUR          MEUR

Fiskars Brands                       5.1    5.4     -5   22.7
Inha Works                           0.2    0.2      9    0.8
Real Estate                          0.3    0.3      9    1.3
Eliminations and other oper.         0.1    0.1      1    0.4
CORPORATE TOTAL                      5.7    5.9     -4   25.1

SEGMENTINFORMATION                   1-3    1-3    chg   1-12
INVESTMENTS                         2005   2004      %   2004
                                    MEUR   MEUR          MEUR
Fiskars Brands                      10.4    3.3    210   15.8
Inha Works                           0.7    0.4     90    1.3
Real Estate                          0.8    0.6     41    1.9
Assoc.comp.Wärtsilä                                      22.2
Other                                0.3    0.4    -10    0.6
CORPORATE TOTAL                     12.3    4.7    162   41.8

Short delivery times are a prerequisite in Fiskars' fields of operations.
Therefore, the backlog of orders and changes in it are not of
significant importance.

CONTINGENCIES                       3/05   3/04  12/04
                                    MEUR   MEUR   MEUR
Real estate mortgages                  0      0      0
Pledged assets                         1      0      1
Bills of exchange                      0      1      0
Lease contingencies                   29     41     33
Other contingencies                    0      6      4
TOTAL CONTINGENCIES                   30     48     38


Forward exch. contracts              138     81    114
Interest rate swaps                   23     87     22
FRA's                                 31     36     29

Nominal values also include closed contracts.

RECONCILIATION OF NET PROFIT                1-3   1-12
                                           2004   2004
                                           MEUR   MEUR
NET PROFIT ACCORDING TO FAS                11.1   44.9
Change in biological assets                 0.1    2.0
Revenue recognition                        -0.2   -0.2
Inventory valuation                        -0.3   -0.1
Employee benefits                          -0.1    3.1
Development costs                           0.0    0.1
Goodwill amortization and                   1.0    2.5
impairment                                  0.1   -0.5
Finance leases                              0.0    0.0
Deferred tax effect                         0.1   -2.8
Assoc. comp. Wärtsilä                       0.6    5.8
Other adjustments                           0.0   -0.2
NET PROFIT ACCORDING TO IFRS               12.5   54.6

RECONCILIATION OF EQUITY            1.1.  31.3. 31.12.
                                    2004   2004   2004
                                    MEUR   MEUR   MEUR
EQUITY ACCORDING TO FAS            348.3  343.8  318.8
Biological assets                   28.7   28.9   30.4
Cancellation of revaluations        -9.8   -9.8   -9.8
Re-valuation of real estate          1.1    1.0    0.9
Revenue recognition                 -0.8   -0.9   -0.8
Inventory valuation                 -2.6   -3.4   -2.4
Employee benefits                   -9.7  -10.0   -6.6
Development costs                    2.5    2.5    2.5
Goodwill amortization and
impairment                           0.0    1.0    3.5
Financial leasing                    0.0   -0.1   -0.4
Deferred tax                        -2.9   -3.9   -6.0
Assoc. company Wärtsilä              0.0    1.2    5.3
Other adjustments                    0.0    0.1    0.3
TOTAL IFRS RESTATEMENT               6.3    6.5   16.9
EQUITY ACCORDING TO IFRS           354.6  350.3  335.7


Accounting principles

Description of business

Fiskars Oyj Abp is a Finnish public limited liability company
listed in Finland with domicile in Pohja. Fiskars Group comprises
several diverse business areas the largest one being Fiskars
Brands that manufactures and markets branded consumer products
globally. Other businesses include manufacturing and marketing of
aluminum boats, real estate operations and a strategic
shareholding in Wärtsilä Oyj Abp qualifying as an investment in an

Statement of compliance

The consolidated financial statements of Fiskars Group (“Fiskars”
or “the Group”) are prepared in accordance with International
Financial Reporting Standards (IFRS) and its Interpretations. The
Group adopted the Standards as from 1 January 2005. Previously the
consolidated financial statements were prepared in accordance with
Finnish generally accepted accounting principles (Finnish GAAP).
The Group has applied IFRS 1 First-time Adoption of International
Financial Reporting Standards in the transition to IFRSs. The
comparative information for the year ended 31 December 2004 and
the opening IFRS balance sheet at 1 January 2004 have been
adjusted as required under IFRSs. An explanation of the effects of
the adjustments is set out in the Notes to the consolidated
financial statements.

Basis of presentation

The financial statements are prepared in euro. They are prepared
on the historical cost basis, except as disclosed in the
accounting policies below. The (consolidated) financial statements
are presented in millions of euros with one decimal.

Use of Estimates
The preparation of financial statements in conformity with IFRSs,
requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses
during the reporting period. Such estimates and assumptions are
based on historical experience and other justified assumptions
that are believed to be reasonable under the circumstances at the
balance sheet date. These estimates form the basis for judgments
of the items in financial statements. Actual results could differ
from those estimates. Such estimates mainly affect provisions for
inventory obsolescence, restructuring plans, valuation of assets,
the measurement of pension obligations and the probability of
deferred tax assets being recovered against future taxable

Principles of consolidation

The consolidated financial statements include the parent company,
Fiskars Oyj Abp, and all companies in which it holds directly or
indirectly over 50 % of voting rights or over which it has
control. Acquired or established subsidiaries are included in the
consolidated financial statements from their acquisition or
establishment date up to the date that control ceases.

Investments in associates (voting rights 20 %- 50 % and for which
Fiskars has significant influence, but no control) are accounted
for by the equity method. In accordance with the exemption under
IFRS 1 the investment in Wärtsilä is measured at the carrying
amount on the date of transition to IFRSs.

All inter-company transactions, distribution of profits,
receivables, liabilities and unrealised margins are eliminated in
the consolidation.

Acquisitions of subsidiaries are accounted under the purchase
method of accounting. Identifiable assets and liabilities are
measured at their fair values at the acquisition date, the excess
of the cost of acquisition over the fair value of the net assets
acquired is recorded as goodwill. In accordance with the exemption
under IFRS 1, acquisitions prior to the IFRS transition date have
not been restated but the goodwill is recognised in the balance
sheet at carrying amount consistent with previous GAAP since the
estimated recoverable amounts did not indicate any impairment
losses as of December, 31.2003. Under IFRSs, goodwill shall not be
amortized but its recoverable amount and the possible need for
impairment are tested annually.

Foreign operations / subsidiaries

In the consolidated accounts all items in the income statement
accounts of foreign operations / Group companies are translated
into euro at the average foreign exchange rates for the period and
the balance sheet items at foreign exchange rates ruling at the
balance sheet date. Foreign exchange differences arising on
retranslation are recognised in consolidated equity. All
translation differences arising after the date of transition to
IFRSs are presented as a separate component of equity. Pre-
transition translation differences have been debited to the
retained earnings as allowed by the exemption under IFRS 1.
Exchange rate differences resulting from the translation of income
statement items at the average rate and the balance sheet items at
the closing rate are recognised as a separate item in equity.

Transactions in foreign currencies
Foreign currency transactions are translated into euros using the
exchange rates prevailing at the dates of the transactions.
Monetary assets and liabilities are translated using the exchange
rate prevailing at the balance sheet date. Foreign exchange
differences arising from translation are recognised in the income
statement. Foreign exchange gains and losses associated with
financing are included under financial income and expenses.

Derivative financial instruments are recognised initially at cost.
Subsequent to initial recognition, derivative financial
instruments are stated at fair value at the balance sheet date.
The Group does not apply hedge accounting under IAS 39, therefore
changes in fair value are recognised immediately in the income

Fair values of interest rate swaps, the futures and forwards are
measured by using discounted cash flow analyses. Fair values of
currency forwards are based on quoted market prices at the balance
sheet date.

Net sales and revenue recognition principles

Net sales is de?ned as invoiced sales amount less indirect taxes,
rebates and exchange rate adjustments on sales denominated in
foreign currency. Revenue from the sale of goods is recognised in
the income statement when the significant risks and rewards
incidental to the ownership have been transferred to the buyer,
i.e. when a product has been delivered to the client in accordance
with the terms of delivery. There are no such long-term deliveries
in the Group for which the revenue would be recognised using the
percentage-of-completion (POC) method.

The change in value of biological assets resulting from the net
increase of standing timber and the change in the fair value are
recognised in turnover. The cash flows from the sales of standing
timber reduce the carrying value of biological assets and the net
increase of standing timber.

Research and Development
Research and development costs are expensed as they are incurred,
except for significant development projects for which the Group
can reliably demonstrate that they will generate probable future
economic benefits meeting the criteria in IAS 38.  Capitalised
development costs are recognized as intangible assets.

The Group companies have various pension plans in accordance with
local conditions and practises in the countries in which they
operate. The plans are classified as either a defined contribution
plan or a defined benefit plan. Most of these schemes are defined
contribution plans and contributions are charged to the income
statement in the period to which the contributions relate.
In some countries where the Group operates pension schemes are
classified as defined benefit plans. The costs of these plans are
calculated and recognised under the terms of the plan based on
actuarial calculations. The pension obligation is measured as the
present value of the estimated future cash outflows deducted by
the fair value of plan assets at the balance sheet date. All
cumulative actuarial gains and losses are recognized at the date
of transition to IFRSs in accordance with the exemption permitted
in IFRS 1. All actuarial gains and losses (after the transition
date) are recognised in profit or loss.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses, if applicable. Revaluations
included to the land areas in accordance with Finnish GAAP,
amounting to € 9,8 million, have been reversed in the transition
to IFRSs. The land areas have been re-measured applying the
exemption allowed under IFRS 1, i.e. the value of forest areas
only comprises the soil and some of revaluations previously made
to fair value has been allocated to zoned sites. These values
represent the deemed cost for the land areas under IFRS 1.
Property, plant and equipment of acquired subsidiaries are
measured at their fair values at the time of acquisition.
Depreciation is recorded on a straight-line basis over the
expected useful lives of the assets as follows:

Buildings                     20–40 years
Property, plant and equipment      3 –10 years

Land areas are not depreciated.

In accordance with the criteria for finance leases in  IAS 17,
lease contracts in terms of which the Group has substantially all
the risks and rewards of ownership are classified as finance
leases. Finance leases are recognized in the balance sheet as
assets at amounts equal to the fair value of the leased property
or, if lower, the present value of the minimum lease payments. The
associated obligations are included in interest bearing
Lease payments under an operating lease are recognized as an
expense as incurred.

Investment Property
The properties that are not owner-occupied are classified as
investment property. Part of the revaluation that was allocated to
land according to the prior GAAP is assigned to assets classified
as investment property. Land has been revaluated when applying the
exemption of IFRS 1 and to the zoned sites have been allocated
some previously made revaluations based on the fair values. These
values will be taken as deemed cost for land complying with IFRS.
The properties are carried at their cost less accumulated
depreciations and accumulated impairment losses. Investment
property is depreciated within 20-40 years. The fair value of
investment property is disclosed in the notes. The real estate in
Fiskars Village is deemed to be unique and therefore the fair
value cannot be determined reliably.

Goodwill and other intangible assets
The excess of the acquisition cost over fair value of the net
assets acquired is allocated to goodwill. Goodwill has been
allocated to cash-generating units and the unit´s recoverable
amount is compared annually with its carrying amount to determine
potential impairment loss. Goodwill related to the associated
companies is included in the carrying amount of the investment in
the associate.
Other intangible assets are: patents, capitalized development
costs, software and other intangible assets acquired in a business
Intangible assets are amortised on a straight-line basis over the
period of their known or expected useful lives as follows:

     Development costs   3-6 years
     Software       3-6 years
     Other               3-10 years
Intangible assets with an indefinite useful life are not amortised
but they are tested systematically for impairment in annual bases.

Securities and other investments
The publicly traded shares of Fiskars Oyj Abp are classified as
financial assets and recognized at fair value through profit or
loss. Changes in fair value are reported in the profit or loss
account as financial income or expenses and   will be applied when
calculating changes in deferred tax liabilities. Unlisted shares
are carried at lower of cost or net realisable value because their
fair values cannot be measured reliable.

Biological assets

Biological assets consist of wood resources in Finland. These
assets are recognised at fair value less estimated selling costs.
Measurement is based on the price for standing timber at the
balance sheet date, on wood species-specific quantitative and
qualitative information included in the forestry plans as well as
on realised point-of-sale costs. The change in fair value of
standing timber resulting from growth, felling and fluctuation of
prices and expenses is included in operating profit.

Inventories  are  stated at the lower of cost  or  net  realisable
value.  The cost of inventories comprise direct costs of purchase,
costs of conversion and related production overheads. The cost  is
determined by FIFO-method.

Trade and other receivables
Trade  and  other receivables are carried at the original  invoice
amount.  The estimates made for doubtful receivables is  based  on
the  risks  of single items and they are recorded  at  highest  to
their propable value.

Non-current assets held for sale and discontinued operations

The assets and liabilities of major operations sold, classified as
held for sale or classified to be discontinued are presented
separately in the balance sheet. The operating profit of such
operations as well as the net result arising from their sale or
discontinuation, are presented in the income statement separately
from the profit for the period from continuing operations. Non-
current assets and disposal groups held for sale are stated at the
lower of carrying amount and fair value less costs to sell.


The Group operations have been divided into cash-generating units
(CGU) that are smaller than segments. The carrying amounts of the
assets relating to these CGUs are regularly reviewed. To determine
a potential impairment the capital employed by a CGU is compared
against the discounted future cash flows expected to be derived
from that CGU or against the net disposal price. An impairment
loss is recognised for an asset when its carrying amount exceeds
its recoverable amount. An impairment loss previously recognised
for items of property, plant and equipment as well as for
intangible assets other than goodwill is reversed, if there has
been a change in the estimates used to determine the asset’s
recoverable amount. An impairment loss is reversed only to the
amount not exceeding the carrying amount that would have been
determined, net of amortisation or depreciation, had no impairment
loss been recognised for the asset in prior years. An impairment
loss recognized for goodwill is not reversed.

A  provision is recognized in the balance sheet if the entity  has
committed to the probable future obligations, the counterparty  is
aware of the commitment and  the reliable estimate can be made  of
the  amount of the obligation. For example restructuring costs may
fall  under  the  provisions.  A provision  for  restructuring  is
recognised when the detailed formal plan has been established  and
when  there  is a valid expectation that the plan will be  carried

Income Taxes
The Group income taxes include Group companies current taxes based
on taxable profit for the financial period according to local tax
regulations, adjustments to prior year taxes and deferred taxes.
Deferred tax liability or asset are determined on temporary
differences arising between the tax bases and their carrying
amounts using tax rates enacted at the balance sheet date.
Deferred tax liabilities are provided for in full and deferred
income tax assets are recognised to the extent that it is probable
that future taxable profits will be available against which the
unused tax losses can be utilised.

Dividends  proposed by the Board of Directors are not recorded  in
the  financial  statements until they have been  approved  by  the
shareholders at the Annual General Meeting.

Cash and cash equivalents
Bank and cash in the balance sheet consist of cash at bank and in
hand. Cash equivalents comprise liquid available-for-sale
investments with maturity of three months or less. Bank overdrafts
are included in short-term borrowings under current liabilities.

Borrowing costs
Borrowing costs are expensed in the period in which they are