2.3. Foreign currency  

Items included in the financial statements of each of the Group’s enꢀꢀes are measured using the currency  

of the primary economic environment in which the enꢀty operates (‘the funcꢀonal currency’). The funcꢀon-  

al currency of the Company’s operaꢀons in the United States of America, Denmark and China are the U.S.  

dollar, Danish kroner, and Chinese Yuan Renminbi, respecꢀvely. The consolidated financial statements are  

presented in U.S. dollars, which is the Group’s presentaꢀon currency.  

Foreign currency transacꢀons are translated into the funcꢀonal currency using the exchange rates prevail-  

ing at the dates of the transacꢀons. Foreign exchange gains and losses resulꢀng from the seꢄlement of such  

transacꢀons and from the translaꢀon at year-end exchange rates of monetary assets and liabiliꢀes denomi-  

nated in foreign currencies are recognized as operaꢀng expense in the income statement in foreign exchange  

(loss)/gain.  

Group companies that have a funcꢀonal currency different from the presentaꢀon currency are translated  

into the presentaꢀon currency as follows:  

// Assets and liabiliꢀes for each balance sheet presented are translated at the closing rate at the date of that  

balance sheet;  

// Income and expenses for each income statement are translated at average exchange rates;  

// All resulꢀng exchange differences are recognized in other comprehensive income  

1. GENERAL INFORMATION  

Asetek

A/S (‘

the Company’), and its subsidiaries (together, ‘Asetek Group’, ‘the Group’ or ‘Asetek’) designs,  

develops and markets liquid cooling soluꢀons used in personal computers, servers and data centers. The  

Group’s core products uꢀlize liquid cooling technology to provide improved performance, acousꢀcs and  

energy efficiency. The Company is based in Aalborg, Denmark with personnel in USA, China and Taiwan. The  

Company’s shares trade on the Nasdaq Copenhagen under the symbol ‘ASTK’.  

1.1. Liquidity from rights offering  

On May 17, 2023, the Company issued 71,166,167 new common shares of stock in a rights offering, raising  

net proceeds of $16.1 million aꢂer deducꢀon of total issuance costs of $3.7 million (Refer to Note 18). As a  

result of this capital increase, the Company’s liquidity is sufficient to eliminate the going concern uncertainty  

that existed as of the publicaꢀon of the 2022 Annual Report.  

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  

The principal accounꢀng policies applied in the preparaꢀon of these consolidated financial statements are  

set out below. These policies have been consistently applied to all the years presented, unless otherwise  

stated.  

2.4. Property and equipment  

Property and equipment are stated at historical cost less accumulated depreciaꢀon. For assets constructed,  

borrowing costs that are directly aꢄributable to the acquisiꢀon, construcꢀon or producꢀon of a qualifying  

asset are capitalized as part of the historical cost (Note 2.16). Subsequent costs are included in the asset’s  

carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future  

economic benefits associated with the item will flow to the Group and the cost of the item can be measured  

reliably. The carrying amount of any replaced part is derecognized. All other repairs and maintenance are  

charged to the income statement during the financial period in which they are incurred. Depreciaꢀon is  

provided over the esꢀmated useful lives of the depreciable assets, generally three to five years, using the  

straight-line method. The assets’ useful lives and residual values are reviewed, and adjusted if appropriate, at  

the end of each reporꢀng period. Gains and losses on disposals are determined by comparing the proceeds  

with the carrying amount and are recognized as other income or expense in the consolidated income state-  

ment. Property, plant and equipment is grouped as follows:  

2.1. Basis of preparaꢀon  

The consolidated financial statements have been prepared on a historical cost convenꢀon, in accordance  

with Internaꢀonal Financial Reporꢀng Standards (IFRS) as adopted by the European Union (EU) and the sup-  

plementary Danish informaꢀon requirements for class D publicly listed companies.  

2.2. Consolidaꢀon  

The consolidated financial statements comprise the Company and its consolidated subsidiaries. Subsidiaries  

are all enꢀꢀes (including structured enꢀꢀes) over which the Group has control. The Group controls an enꢀty  

when the Group is exposed to, or has rights to, variable returns from its involvement with the enꢀty and has  

the ability to affect those returns through its power over the enꢀty. Subsidiaries are fully consolidated from  

the date on which control is transferred to the Group. They are deconsolidated from the date that control  

ceases. Intercompany transacꢀons, balances, income and expenses on transacꢀons between Group compa-  

nies are eliminated. Profits and losses resulꢀng from the intercompany transacꢀons that are recognized in  

assets are also eliminated. Accounꢀng policies of subsidiaries are consistent with the policies adopted by the  

Group.