Investor Presentaiton
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information.
54
Notes to the consolidated financial statements
Section 1
Basis of preparation
1.1 Material accounting policies and
key accounting estimates
The consolidated financial statements included in this Annual Report have been
prepared in accordance with IFRS Accounting Standards as issued by the International
Accounting Standards Board (IASB) and in accordance with IFRS Accounting Standards
as endorsed by the EU and further requirements in the Danish Financial Statements Act.
Measurement basis
The consolidated financial statements have been prepared on the historical cost basis
except for derivative financial instruments, equity investments, marketable securities
and trade receivables in a factoring portfolio, which are measured at fair value.
Material accounting policies
Apart from the general accounting policies, which are described in note 5.6, Novo
Nordisk's accounting policies are described in each of the individual notes to the
consolidated financial statements. The accounting policies have been applied
consistently in the preparation of the consolidated financial statements for all the
years presented.
Key accounting estimates and judgements
The use of reasonable estimates and judgements is an essential part of the
preparation of the consolidated financial statements. Given the uncertainties inherent
in Novo Nordisk's business activities, Management must make certain estimates
regarding valuation and make judgements on the reported amounts of assets,
liabilities, net sales, expenses and related disclosures.
The key accounting estimates identified are those that have a significant risk of
resulting in a material adjustment to the carrying amount of assets and liabilities in
the following reporting period. An example being the estimation of US sales
deductions and provisions for sales rebates.
When determining estimates and assumptions, Management has assessed the
qualitative and quantitative impact of climate-related matters. It is Management's
assessment that the effect of climate-related matters does not significantly impact
estimates and assumptions.
Management bases its estimates on historical experience and various other
assumptions that are held to be reasonable under the circumstances. The estimates
and underlying assumptions are reviewed on an ongoing basis. If necessary, changes
are recognised in the period in which the estimate is revised. Management considers
the key accounting estimates to be reasonable and appropriate based on currently
available information. The actual amounts may differ from the amounts estimated as
more detailed information becomes available.
In addition, Management may make certain judgements in the process of applying
the entity's accounting policies, for example the classification of a transaction as an
asset acquisition or a business combination.
Management regards those listed below as the key accounting estimates applied in
the preparation of the consolidated financial statements. Refer to the specific notes
for further information on the key accounting estimates as well as assumptions
applied. Management did not identify material judgements made in the current
reporting period apart from those involving estimations.
Key accounting estimates
Estimate of US sales deductions and provisions for sales rebates
Applying materiality
The consolidated financial statements are a result of processing large numbers
of transactions and aggregating those transactions into classes according to their
nature or function. The transactions are presented in classes of similar items in the
consolidated financial statements. If a line item is not individually material, it is
aggregated with other items of a similar nature in the consolidated financial
statements or in the notes.
Management provides the specific disclosures required by IFRS unless the information
is not applicable or is considered immaterial to the decision-making of the primary
users of these financial statements.
1.2 Changes in accounting policies and disclosures
Management has assessed the impact of new or amended accounting standards and
interpretations (IFRSS) issued by the IASB and IFRSS endorsed by the European Union
effective on or after 1 January 2023. Management assessed that application of these
has not had a material impact on the consolidated financial statements for 2023.
Furthermore, Management has assessed the impact of new or amended accounting
standards and interpretations (IFRSS) issued by the IASB that have not yet become
effective. No new or amended accounting standards or interpretations (IFRSS) have
been early adopted. Management does not anticipate any significant impact on the
consolidated financial statements in the period of initial application after the adoption
of these amendments.
Estimate in determining the fair value of intangible assets and assessment of impairment of intangible assets
Estimate regarding deferred income tax assets and provision for uncertain tax positions
Estimate of ongoing legal disputes, litigation and investigations
Risk
High
Medium
Note(s)
2.1, 3.5
3.1
Medium
2.6
Medium
3.5View entire presentation