Getinge 2022 Annual Report

Getinge 2022 Annual Report Key audit matters Introduction Strategy Corporate Governance Annual Report Sustainability Report Other information Contents How our audit addressed the Key audit matter Valuation of intangible assets With reference to Note 1 and Note 12 in the annual report. Goodwill and other intangible assets with an indefinite useful life represents a significant part of the Balance Sheet of Getinge. The company performs an impairment assessment of the assets based on a calculation of the discounted cash flow for the cash generating units in which goodwill and other intangible assets are reported. This impairment test is based on a high level of judgments and assumptions regarding future cash flows. Information is provided in Notes 1 and 12 as to how the company's management has under- taken its assessments, and also provides information on important assumptions and sensitivity analyses. Key variables in the test are growth rate, profit margins and discount factor (cost of capital). It is presented that no impairment requirement has been identified based on the assumptions undertaken. In our audit, we have evaluated the calculation model applied by management. We have reconciled and critically tested essential variables against budget and strategic plan for the Company and business areas. We have analyzed the accuracy on how previous years assump- tions have been met and assessed any adjustments to assumptions compared to previous year, as a result from changes in the business and external factors. We have tested the sensitivity analysis for key variables in order to assess the risk of need for impairment. We have also assessed the disclosures included in the consolidated accounts. Revenue recognition With reference to Note 1, 2, 15 and 23 in the annual report. Sales of the group include products, services and rental. Sales are primarily made via the global sales organization of the group. Revenue recognition represent a significant area in our audit given its importance to the financial reporting of the group. Specific attention is given to that revenue transactions represent valid revenue transactions in accordance with accounting framework and that these are accounted for in the proper period. The group have routines and procedures to monitor and secure that revenue recognition is made in accordance with the group's accounting principles. We have reviewed the system and procedures related to the revenue process and evaluated that the accounting principles of the group are consistent to IFRS. Our audit and procedures include sample testing of revenue transactions in local entities to supporting documentation such as customer agreement, sales order, delivery related documentation, customer invoices, price lists and customer confirmation in combination with or alternatively to verifi- cation of subsequent payments. We have evaluated manual transactions using computer assisted techniques and specifically any adjustments of revenue recognition. We have additionally assessed the disclosures related to account's receivables included in the consolidated accounts. Accounting for provisions relating to legal exposures With reference to Note 1, 22 and 26 in the annual report. The assessment of provisions or contingent liabilities relating legal exposures from claims and regulatory investigations comprise a significant area in the Group's financial reports. The assessment of relevant provisions for legal exposures is inherently associated with a large degree of uncertainty and subjectivity. The main individual provision relates to expected costs associated with surgical mesh product liability claims previously produced by the Group. In our audit, we have particularly focused our audit activities on the assessment of the provisions related to surgical mesh product liability claims and ongoing regulatory investigations. We have received Management's calculations for legal exposures and received statements from external legal advisors to relevant matters. We have assessed the reasonability in Management's calculations taking into consideration information from legal advisors and supporting documenta- tion for related payments. We have additionally assessed the disclosures of the consolidated accounts. 126

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