Investor Presentaiton
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
Financial assets and liabilities measured at fair value can be categorised using the fair
value measurement hierarchy above. There were no transfers between the 'Active
market data' and 'Directly or indirectly observable market data' categories during 2023
or 2022. The fair value of issued Eurobonds, which is disclosed in note 4.6, are based
on 'Active market data'. There are no significant intangible assets or items of property,
plant and equipment measured at fair value. For a description of the credit quality of
financial assets such as trade receivables, cash at bank, current debt and derivative
financial instruments, refer to notes 4.4 and 4.5.
4.9 Financial assets and liabilities
Fair value measurement hierarchy
DKK million
2023
2022
DKK million
Financial assets by category
2023
2022
Active market data (level 1)
16,052
Directly or indirectly observable market data (level 2)
2,344
Other financial assets
Marketable securities
571
559
15,838
10,921
Not based on observable market data (level 3)
33,398
Financial assets at fair value through
Total financial assets at fair value
51,794
11,288
2,727
34,159
48,174
the income statement
16,409
11,480
Active market data (level 1)
Derivative financial instruments (note 4.5)
2,344
2,727
Directly or indirectly observable market data (level 2)
1,272
2,903
Derivatives used as hedging instruments (assets)
2,344
2,727
Other financial assets
682
457
Not based on observable market data (level 3)
Total financial liabilities at fair value
1,272
2,903
Trade receivables
31,729
16,593
Other receivables and prepayments
(current and non-current)
9,498
⚫less prepayments and VAT receivables
(8,312)
6,211
(5,073)
Cash at bank (note 4.7)
14,392
Financial assets at amortised cost
47,989
Trade receivables in a factoring portfolio
33,041
12,653
30,841
33,967
Financial assets at fair value through other
comprehensive income
33,041
33,967
Total financial assets at the end
of the year by category
99,783
79,015
Financial liabilities by category
Derivative financial instruments (note 4.5)
1,272
2,903
Financial assets at fair value through the income statement
Derivatives used as hedging instruments
Derivatives used as hedging instruments (liability)
1,272
2,903
Financial assets at amortised cost
Borrowings (non-current) (note 4.6)¹
20,528
24,318
Borrowings (current) (note 4.6)1
6,478
Trade payables
25,606
1,466
15,587
Other liabilities (non-current)
189
Other liabilities (current)
28,705
23,606
⚫less VAT and duties payable
(600)
(875)
Financial liabilities measured at
amortised cost
80,906
64,202
Total financial liabilities at the end
of the year by category
82,178
67,105
1. Refer to note 4.6 for a maturity analysis for non-current and current borrowings.
100
ACCOUNTING POLICIES
Depending on purpose, Novo Nordisk classifies financial instruments into the
following categories:
Financial assets at fair value through other comprehensive income
Financial liabilities at amortised cost
Recognition and measurement
Financial assets measured at fair value through the income statement consist of other
financial assets, which comprise of equity investments, and marketable securities.
These financial instruments are initially recognised at fair value. Net gains and losses
arising from changes in the fair value of equity instruments and marketable securities
are recognised in the income statement as financial income or expenses.
For a description of accounting policies on derivative financial instruments designated
to hedge accounting, refer to note 4.5.
Financial assets at amortised cost are cash at bank and non-derivative financial assets
solely with payments of principal and interest. Novo Nordisk normally 'holds-to-collect'
the financial assets to attain the contractual cash flows. If collection is expected within
one year (or in the normal operating cycle of the business, if longer), they are classified
as current assets. If not, they are presented as non-current assets. These are initially
measured at fair value less transaction costs, except for trade receivables that are initially
measured at the transaction price. Subsequently, they are measured at amortised cost
using the effective interest method less impairment. For a description of accounting
policies on trade receivables, refer to note 3.4.
Financial assets at fair value through other comprehensive income are trade
receivables that are held to collect or to sell in factoring agreements.
Financial liabilities at amortised cost consist of borrowings (loans, issued Eurobonds,
bank overdrafts and lease liabilities), trade payables and other liabilities (primarily
employee cost payables, payables related to assets under construction, sales rebates
and deferred income). These are initially recognised at the fair value less transaction
costs. Subsequently, they are measured at amortised cost using the effective interest
method. For initial recognition of lease liabilities refer to note 4.6.
Fair value measurement
If an active market exists, the fair value of a financial instrument is based on the
most recently observed market price at the end of the reporting period. If a financial
instrument is quoted in a market that is not active, Novo Nordisk bases its valuation
on the most recent transaction price. Adjustment is made for subsequent changes
in market conditions, for instance by including transactions in similar financial
instruments assumed to be motivated by normal business considerations. The
fair values of quoted investments are based on current bid prices at the end of
the reporting period.
Financial assets for which no active market exists are carried at fair value based on a
valuation methodology. The fair value of such financial instruments are determined
on the basis of quoted market prices of financial instruments traded in active markets.
The fair value of standard and simple financial instruments, such as foreign exchange
forward contracts, interest rate swaps, currency swaps and unlisted bonds, is
measured according to generally accepted valuation techniques. Market-based
input is used to measure the fair value.
The fair value of trade receivables in a factoring portfolio is calculated based on the
net invoice amount (invoice amount less charge-backs) less the fee payable to the
factoring entity. The factoring fee is insignificant due to the short period between the
time of sale to the factoring entity and the invoice due date and the rate applicable.
Inputs into the estimate of US wholesaler charge-backs are described in note 2.1.
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