Investor Presentaiton
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
Impairment test
Goodwill and intangible assets with an indefinite useful life and intangible assets
not yet available for use are tested for impairment when indicators of impairment
exist. However, they are tested at least annually, irrespective of whether there is any
indication that they may be impaired. Goodwill is allocated to operating segments
based on expected future cash flow from products utilizing the synergies and
know-how acquired.
Impairment tests are based on Management's projections and anticipated net present
value of estimated future cash flows from marketable products. The discount rate
used is based on the Group WACC, adjusted where appropriate, to reflect the risk of
the specific asset tested. Fair value is determined using largely unobservable inputs.
Accordingly, the valuation technique and inputs used to measure fair value are
classified as level 3 in the fair value hierarchy.
Assets that are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable. Factors considered material that could trigger an impairment test
include the following:
•
•
•
•
.
Development of a competing drug
Realised sales trending below predicted sales
Changes or anticipated changes in participation rates or reimbursement policies
Inconsistent or unfavourable clinical readouts
Changes in the legal framework covering patents, rights and licences
Advances in medicine and/or technology that affect the medical treatments
Adverse impact on reputation and/or brand names
Changes in the economic lives of similar assets
Relationship to other intangible assets or property, plant and equipment
If the carrying amount of intangible assets exceeds the recoverable amount based on
the existence of one or more of the above indicators of an impairment, any impairment
is measured based on discounted projected cash flows. Impairments on intangible
assets, other than goodwill, are reviewed at each reporting date for possible reversal.
KEY ACCOUNTING ESTIMATES ON INTANGIBLE ASSETS
Impairment tests are based on Management's projections and anticipated net present
value of estimated future cash flows from marketable products.
When collaboration agreements contain elements of acquisition of intangible assets and
research and development activities to be performed by the counterpart, Management
estimates the allocation of payments that should be deferred to the acquisition of
intangible assets and prepaid research and development activities respectively.
3.2 Property, plant and equipment
DKK million
2023
Cost at the beginning of the year
Additions during the year
Disposals during the year
Transfer and reclassifications
Effect of exchange rate adjustment
Cost at the end of the year
Land and
buildings
Assets
under
Property,
plant and
equipment
Other
Plant and
machinery equipment construction
43,403
37,548
8,114
22,361
111,426
2,681
47
873
27,830
31,431
(690)
(952)
(624)
(562)
(2,828)
4,246
4,679
731
(9,656)
(650)
(371)
(115)
(310)
(1,446)
48,990
40,951
8,979
39,663
138,583
Depreciation and impairment losses at the beginning of the year
16,781
22,935
5,039
44,755
Depreciation for the year
2,450
1,919
1,086
5,455
Impairment losses for the year
6
118
24
562
710
Depreciation and impairment losses reversed on disposals during the year
(664)
(942)
(597)
(562)
(2,765)
Effect of exchange rate adjustment
(248)
(196)
(89)
(533)
Depreciation and impairment losses at the end of the year
18,325
23,834
5,463
47,622
Carrying amount at the end of the year
30,665
17,117
3,516
39,663
90,961
2022
Cost at the beginning of the year
Additions from acquisition of businesses (note 5.3)
Additions during the year
Disposals during the year
Transfer and reclassifications
Effect of exchange rate adjustment
Cost at the end of the year
41,076
35,944
7,776
11,091
95,887
297
2
14
313
706
143
645
13,160
14,654
(205)
(123)
(621)
(33)
(982)
1,000
1,152
329
(2,481)
529
430
(29)
624
1,554
43,403
37,548
8,114
22,361
Depreciation and impairment losses at the beginning of the year
14,669
21,138
4,718
111,426
40,525
Depreciation for the year
2,245
1,793
916
4,954
Impairment losses for the year
3
10
3
33
49
Depreciation and impairment losses reversed on disposals during the year
(188)
(123)
(615)
(33)
(959)
Effect of exchange rate adjustment
52
117
17
186
Depreciation and impairment losses at the end of the year
16,781
22,935
5,039
44,755
Carrying amount at the end of the year
26,622
14,613
3,075
22,361
66,671
33
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