Getinge 2022 Annual Report
Getinge 2022 Annual Report
Note 1 cont.
Introduction
Strategy
Corporate Governance
Annual Report
Sustainability Report
Other information
Contents
carrying amounts. Such grants affect recognized earnings over the
asset's useful life by reducing depreciation (see Note 33).
Financial income and expenses
Financial income and expenses include interest income on bank
deposits and receivables, interest expenses on loans, income from
dividends, unrealized and realized profits and losses on financial
investments, exchange rate differences, and the change in value of
derivative instruments used in financial activities. Borrowing costs
in conjunction with the raising of loans are recognized as part of
the loan to which they pertain and are charged to profit or loss
during the term of the loan.
Intangible assets
Goodwill
Goodwill comprises the portion of a purchase price for an acquisi-
tion that exceeds the market value of the identifiable assets, with
deductions for liabilities and contingent liabilities, calculated on
the acquisition date, on the share of the acquired company's assets
acquired by the Group. In a business acquisition whereby the acqui-
sition costs are less than the net value of acquired assets, assumed
liabilities and contingent liabilities, the difference is recognized
directly in profit or loss. Goodwill arising in conjunction with the
acquisition of a foreign entity is treated as an asset in the foreign
entity and translated at the exchange rate on the closing date.
Goodwill arising from the acquisition of associated companies is
included in the value of the holdings in the associated company.
An impairment test of goodwill is conducted once per year or more
often if there is an indication that there could have been a decrease
in value. Impairment of goodwill is recognized in profit or loss. The
gain or loss in connection with the divestment of an entity includes
the residual carrying amount of goodwill that pertains to the
divested unit.
Other intangible assets
Other intangible assets comprise capitalized development costs,
customer relations, technical know-how, trademarks, agreements
and other assets. Intangible assets are recognized at cost with
deductions for accumulated amortization and any impairment
losses. Amortization is applied proportionally over the asset's anti-
cipated useful life, which usually varies between three and 15 years.
Acquired intangible assets are recognized separately from goodwill
if they fulfill the criteria for qualifying as an asset, implying they can
be separated or they are based on contractual or other legal rights
and that their market value can be established in a reliable manner.
Intangible assets that are recognized separately from goodwill in
acquisitions of operations include customer relations, technical
know-how, trademarks, agreements, etc.
Acquired intangible assets are measured at market value and
amortized on a straight-line basis over their anticipated useful life.
The useful life can, in certain cases, be indefinite. These intangible
assets are not amortized, instead they are tested for impairment
every year or more often if there is an indication that there could
have been a decrease in value. Costs for development, whereby
research results or other knowledge is applied to produce new
products, are recognized as an asset in the balance sheet to
the extent that these products are expected to generate future
financial benefits. These costs are capitalized when management
deems that the product is technically and financially viable, which
is usually when a product development project has reached a
defined milestone in accordance with an established project
model. The capitalized value includes expenses for material, direct
expenses for salaries and indirect expenses that can be assigned
to the asset in a reasonable and consistent manner. In other cases,
development costs are expensed as they arise. Research costs
are charged to earnings as they arise. Capitalized expenses are
amortized on a straight-line basis from the point in time at which
the asset is put into commercial operation and during the asset's
estimated useful life. The amortization period is determined based
on historical data and taking into consideration future changes in
technology. For capitalized development costs, the amortization
period is five to 15 years and for software three years.
Tangible assets
Properties, machinery, equipment and other tangible assets are
recognized at cost, with deductions for accumulated depreciation
and any impairment losses. The cost includes the purchase price
and expenses directly attributable to the asset to bring the asset to
the site and in the working condition for its intended use. Examples
of directly attributable expenses included in the cost are delivery
and handling costs, installation, legal services and consultancy
services. Assets provided to the company in conjunction with the
acquisition of new subsidiaries are recognized at market value
on the acquisition date. Depreciation is conducted straight line.
The value in the balance sheet represents acquisition costs with
deduction for accumulated depreciation and any impairment
losses. Land is not depreciated since it is deemed to have an infinite
economic life, however, the depreciation of other assets is based on
the following anticipated useful lives:
Class of assets
Land improvements
Buildings
Machinery
Equipment
Production tools
Rental equipment
Cars
Computer equipment
Depreciation,
number of years
40-50
10-50
5-25
10
5
5
Tangible assets comprising parts with different useful lives are
treated as separate components of tangible assets. Standard
maintenance and repair costs are expensed during the periods in
which they arise. More extensive repair and upgrading costs are
capitalized and depreciated over the item's remaining anticipated
useful life. Capital gains/losses are recognized under Other
operating income/expenses.
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