Notes for P&L
All amounts in SEKm unless otherwise stated
Note 15 Intangible non-current assets
| 2021-12-31 Group |
Goodwill | Supplier relationships | Customer relationships | Technology | Research and development | Software | Other intangible asset | Total |
|---|---|---|---|---|---|---|---|---|
| Accumulated cost | ||||||||
| Opening balance | 1,109.6 | 838.7 | 70.3 | 334.3 | 131.3 | 70.1 | 2.7 | 2,557.0 |
| Acquisitions | 3,397.7 | 1,918.5 | – | 3.0 | 28.4 | 57.8 | 0.1 | 5,405.5 |
| Investments | – | – | – | 1.1 | 24.1 | 14.3 | 0.5 | 40.0 |
| Reclassifications | – | – | – | – | -2.6 | -0.5 | – | -3.1 |
| Divestments and disposals | – | – | – | – | – | -1.2 | 0.0 | -1.2 |
| Translation effect | 30.7 | 18.4 | 0.8 | 3.9 | 2.9 | 1.0 | 0.3 | 58.0 |
| Closing balance | 4,538.0 | 2,775.6 | 71.1 | 342.3 | 184.1 | 141.5 | 3.6 | 8,056.2 |
| Accumulated amortisation and impairment losses | ||||||||
| Opening balance | -10.0 | -331.5 | -8.2 | -86.3 | -67.9 | -48.6 | -1.7 | -554.2 |
| Acquisitions | – | – | – | – | -1.4 | -31.8 | -0.1 | -33.3 |
| Amortisation | – | -210.5 | -7.0 | -32.3 | -11.5 | -15.2 | -0.5 | -277.0 |
| Reclassifications | – | – | – | – | 2.6 | 0.5 | – | 3.1 |
| Divestments and disposals | – | – | – | – | – | 1.2 | – | 1.2 |
| Translation effect | -0.2 | -0.9 | -0.2 | -1.0 | -1.5 | -0.6 | -0.4 | -4.8 |
| Closing balance | -10.2 | -542.9 | -15.4 | -119.6 | -79.7 | -94.5 | -2.7 | -865.0 |
| Carrying amount at year-end | 4,527.8 | 2,232.7 | 55.7 | 222.7 | 104.4 | 47.0 | 0.9 | 7,191.2 |
| Carrying amount at start of year | 1,099.6 | 507.2 | 62.1 | 248.0 | 63.4 | 21.5 | 1.0 | 2,002.8 |
| 2020-12-31 Group |
Goodwill | Supplier relationships | Customer relationships | Technology | Research and development | Software | Other intangible asset | Total |
|---|---|---|---|---|---|---|---|---|
| Accumulated cost | ||||||||
| Opening balance | 982.2 | 689.2 | 51.4 | 297.3 | 110.2 | 63.8 | 2.7 | 2,196.8 |
| Acquisitions | 149.3 | 174.3 | 20.6 | 41.8 | 5.6 | 1.5 | 0.6 | 393.7 |
| Investments | – | – | – | 0.4 | 19.6 | 9.4 | – | 29.4 |
| Reclassifications | – | – | – | – | -2.2 | -2.3 | – | -4.5 |
| Divestments and disposals | – | – | – | – | – | -0.4 | – | -0.4 |
| Translation effect | -21.9 | -24.8 | -1.7 | -5.2 | -1.9 | -1.9 | -0.6 | -58.0 |
| Closing balance | 1,109.6 | 838.7 | 70.3 | 334.3 | 131.3 | 70.1 | 2.7 | 2,557.0 |
| Accumulated amortisation and impairment losses | ||||||||
| Opening balance | -10.1 | -265.6 | -2.8 | -58.0 | -54.6 | -43.3 | -1.3 | -435.7 |
| Acquisitions | – | – | – | – | -1.9 | -0.3 | -0.5 | -2.7 |
| Amortisation | – | -73.9 | -5.6 | -29.4 | -12.7 | -7.6 | -0.4 | -129.6 |
| Reclassifications | – | – | – | – | 1.2 | 0.5 | – | 1.7 |
| Divestments and disposals | – | – | – | – | – | 0.4 | – | 0.4 |
| Translation effect | 0.1 | 8.0 | 0.2 | 1.1 | 0.1 | 1.7 | 0.5 | 11.7 |
| Closing balance | -10.0 | -331.5 | -8.2 | -86.3 | -67.9 | -48.6 | -1.7 | -554.2 |
| Carrying amount at year-end | 1,099.6 | 507.2 | 62.1 | 248.0 | 63.4 | 21.5 | 1.0 | 2,002.8 |
| Carrying amount at start of year | 972.1 | 423.6 | 48.6 | 239.3 | 55.6 | 20.5 | 1.4 | 1,761.1 |
| Goodwill distributed by business area | 2021-12-31 | 2020-12-31 |
|---|---|---|
| Labtech | 454.3 | 310.9 |
| Medtech | 4,073.5 | 788.7 |
| Total | 4,527.8 | 1,099.6 |
| 2021-12-31 | 2020-12-31 | |||
|---|---|---|---|---|
| Parent company | Software | Total | Software | Total |
| Accumulated cost | ||||
| Opening balance | 0.6 | 0.6 | 0.6 | 0.6 |
| Investments | 0.3 | 0.3 | – | – |
| At year-end | 0.9 | 0.9 | 0.6 | 0.6 |
| Accumulated amortisation | ||||
| Opening balance | -0.5 | -0.5 | -0.4 | -0.4 |
| Depreciation and amortisation | -0.1 | -0.1 | -0.1 | -0.1 |
| Closing balance | -0.6 | -0.6 | -0.5 | -0.5 |
| Carrying amount at year-end | 0.3 | 0.3 | 0.1 | 0.1 |
| Carrying amount at start of year | 0.1 | 0.1 | 0.2 | 0.2 |
Accounting principle
An intangible asset is an identifiable nonmonetary asset, without physical substance, that is used for marketing, producing or supplying goods or services, or for rental and administration. To be recognised as an asset, it must be probable that the future economic benefits attributable to the asset will benefit the Company and that the (acquisition) cost can be calculated reliably. Additional expenditure for an intangible asset is only added to the cost if it increases future economic benefits beyond the original assessment and if the expenditure can be calculated reliably. All other expenditure is expensed as it is incurred.
Goodwill is accounted for as an intangible non-current assets with indefinable useful life. Goodwill represents the difference between the cost, in connection with a business combination, and the fair value of acquired assets, assumed liabilities and contingent liabilities. Goodwill and intangible non-current assets with indefinable useful lives are measured at cost, less any accumulated impairment losses. Goodwill and intangible non-current assets with indefinable useful lives are allocated among cash-generating units and are not amortised but are tested for impairment on an annual basis.
When acquiring businesses, supplier relations, customer relations and technology are measured at fair value. AddLife applies a model where average historical costs of acquiring equivalent assets, or discounted future cash flow, is used for valuation.
Intangible assets aside from goodwill are recognised at their original cost, less accumulated amortisation and impairment losses. Amortisation is charged primarily on a straight line basis and is based on the useful lives of the assets, which are reviewed on an annual basis. Amortisation is included in cost of sales, selling expenses or administrative expenses, depending on where in the business the assets are used.
Expenditure for development, in which the results of research or other knowledge are applied to achieve new or improved products or processes, is recognised as an asset in the balance sheet if the product is technically and commercially viable and the company has sufficient resources to complete development and subsequently use or sell the intangible asset. Other development expenditure is expensed as it is incurred.
Amortisation is charged primarily on a straight line basis and is based on the useful lives of the asset.
| Useful life | |
| Supplier and customer relations | 10 years |
| Software | 3-5 years |
| Technology | 5-15 years |
| Research and development | 5-10 years |
| Goodwill and trademarks | indeterminable |
Impairment testing of goodwilll
At 31 December 2021 AddLife’s recognised goodwill amounts of SEK 4,527.8 million (1,099.6). All intangible assets with indeterminable useful life should be tested for impairment at least annually. Single assets are tested more often in case there are indications of impairment. Impairment testing is performed on the cash-generating units, which equal the business areas. When Addlife makes an acquisition, the acquired business is integrated with to the group to such an extent that it is not possible to separate assets and cash flows attributable to separate companies. The recoverable amount has been calculated based on value in use, using the discounted cash flow model. Assumptions were made concerning net sales, gross margin, overhead costs, working capital required and investments required based on previous experiences The parameters have been set based on the Group’s budget for the upcoming financial year 2022 for each business area, which has been approved by the Board of Directors.
When calculating the recoverable amount for cash-generating units that contain leased assets, the choice has been made to deduct future leasing payments from the expected cash flows. The usufruct assets are included in the unit's carrying amount. In order to obtain a carrying amount for the unit that is consistent with the estimated recoverable amount, the carrying amount is reduced by the unit's leasing liability.
An annual growth rate of 2 percent (2) was assumed for cash flows beyond the budget period. Calculated residual value at the end of the useful life is included in the value in use. Cash flows were discounted using a weighted cost of capital corresponding to 8.4 percent (8.8) before tax. These calculations show that value in use significantly exceeds the carrying amount. Consequently, impairment testing indicated no impairment. No reasonable possible changes in key assumptions are expected to lead to impairment.
Each year, trademarks are tested for impairment applying the same policies as with goodwill. No events or changes in circumstances were identified that would motivate impairment testing for other intangible non-current assets that are amortised.
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