Investor Presentaiton
nuuday
Management review Financial statements Section 1
Section 2 Section 3 Section 4
Section 5
Section 6
Parent company
Statements
..........
3.1 | Intangible assets (continued)
AIA Critical accounting estimates and judgements
Management estimates useful lives for
intangible assets based on periodic stud-
ies of customer churn or actual useful
lives and the intended use for those
assets. Such studies are completed or
updated when new events occur that
may have the potential to impact the
determination of the useful life of the
asset, i.e. when events or circumstances
occur that indicate that the carrying
amount of the asset may not be recov-
erable and should therefore be tested
for impairment. Any change in customer
churn or the expected useful lives of
these assets is recognised in the financial
statements, as soon as any such change
has been ascertained, as a change in a
critical accounting estimate.
Impairment testing of intangible assets
Intangible assets comprise a significant
portion of Nuuday Group's total assets.
The measurement of the recoverable
amount of intangible assets is a complex
process that requires significant Man-
agement judgements in determining vari-
ous assumptions to be used to calculate
cash-flow projections, discount rates and
terminal growth rates.
The sensitivity of changes in the
assumptions used to determine the
recoverable amount may be significant.
Furthermore, the use of other estimates
or assumptions when determining the
recoverable amount of the assets may
result in other values and could result in
required impairment of intangible assets.
The assumptions used for the impair-
ment testing of goodwill are shown in the
section Impairment testing of goodwill
and intangible assets with indefinite
useful lives.
Impairment testing of goodwill and
intangible assets with indefinite
useful lives
The carrying amount of goodwill is
tested for impairment annually and if
events or changes in circumstances indi-
cate impairment. The annual tests were
carried out at 1 October 2022 and at
1 October 2021, respectively.
Impairment testing is an integral part of
Nuuday's budget and planning process,
which is based on long-term business
plans with projection until 2030. The dis-
count rates applied reflect specific risks
relating to the individual cash-generating
unit. The recoverable amount is based on
the value in use determined on expected
cash flows based on long-term business
plans approved by Management.
Projections for the terminal period are
based on general expectations and risks,
taking into account the general growth
expectations for the telecoms industry
in Denmark.
The long-term business plans are based
on current trends. The budget period
includes cash flow effects from com-
pleted restructurings combined with
effects of strategic initiatives aimed at
improving or maintaining trend lines.
For the impairment testing of goodwill,
Nuuday uses a pre-tax discount rate for
each of the four cash-generating units.
Sensitivity analyses have been per-
formed to assess the probability that
any likely changes in cash flow or dis-
count rate will result in an impairment
loss. One of the key swing factors behind
the projection is the EBITDA level in the
planning period. A sensitivity analysis
indicates that EBITDA may be approxi-
mately 10% lower in each year in the
planning period before a write-down
would have to be recognised. If the
Key assumptions for calculating the value in use
for the significant¹ goodwill amounts (DKKm)
Carrying amount of goodwill at 31 December 2022 (DKKm)
Carrying amount of goodwill at 31 December 2021 (DKKm)
Market-based growth rate applied at 1 October 2022 to
extrapolated projected future cash flows for the period
following 2030
YouSee
Nuubrands
Business
3,603
3,603
1,030
1,030
895
895
2.3%
2.3%
2.3%
Market-based growth rate applied at 1 October 2021 to
extrapolated projected future cash flows for the period
following 2030
1.0%
1.0%
1.0%
Applied pre-tax discount rate at 1 October 2022
11.7%
11.7%
11.7%
Applied pre-tax discount rate at 1 October 2021
7.6%
7.6%
7.6%
1 Representing 99% of the total carrying amount in 2022.
Nuuday Annual Report 2022
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