Docusign Envelope ID: C3FA99D6-D1CC-8B20-8375-45ECF9EA4227
Notes
Note 1
Accounting policies (continued)
obligations of the contract and allocates the transaction price to
these performance obligations. Payment terms are usually "net 30
days" but may in some instances vary according to specific
contractual terms. Advances and pre-delivery payments are normal
and not considered a significant financing component as they are
intended to protect Satair A/S from the customer failing to complete
its obligations under the contract.
FINANCIAL POSITION
Intangible assets
Acquired distribution rights are recognised at cost less amortisation.
Acquired IT-software and development costs are recognised at cost
and measured at cost less accumulated amortisation and
impairment.
Cost of goods sold
Amortization
Cost of goods sold comprises the cost of commercial products
consumed to achieve the revenue for the year and other direct,
variable costs including write-downs for obsolescence.
Rights under non-cancellable contracts are amortised on a linear
basis over the contract term. Other rights are amortised on a linear
basis over the expected useful life.
The expected useful lives are as follows:
Other operating income
Other operating income includes items of a secondary nature
relative to the enterprise’s core business. Operating income
includes a management fee which is determined as a royalty on
external sales based on the intra-group ownership of distribution
rights, inventory levels, and market data.
Owned assets:
• Distribution rights
• IT-Software and development costs
2 - 20 years
3 - 5 years
The residual values and useful lives of assets are reassessed and
changed annually, if deemed necessary.
Staff expenses
Staff expenses include wages, salaries and pensions for Satair A/S’
employees as well as other staff-related expenses.
Please refer to note 11 for further information on the amortisation
profiles of the company's distribution rights.
Other expenses
Property, plant and equipment
Other expenses comprise expenses to distribution, sales,
advertising, administration etc.
Property, plant and equipment are measured at cost less
accumulated depreciation and impairment. Land is not depreciated.
Amortisation, depreciation and impairment
Cost comprises the purchase price and any costs directly
attributable to the acquisition of the asset until the date when it is
available for use.
Amortisation, depreciation and impairment comprise amortisation
and impairment of intangible assets as well as depreciation and
impairment of property, plant and equipment.
Leases
Financial income and expenses, net
Lease assets and lease liabilities are recognised in the balance
sheet when the leased asset under a lease entered into regarding a
specific identifiable asset is made available to the company in the
lease term and when the company obtains the right to almost all
economic benefits from the use of the identified asset and the right
to control the use of the identified asset.
Financial income and expenses, net comprise interest as well as
foreign exchange adjustments relating to receivables and payables
not stated in the functional currency.
Dividends on capital investments in subsidiaries are recognized as
income in Satair A/S' income statement in the financial year in
which the dividends are declared. Gain and losses from disposal of
subsidiaries and associates are included in the income statement
of Satair A/S at the time of disposal.
On initial recognition, lease liabilities are measured at the present
value of the future lease payments discounted by an incremental
borrowing rate. The following lease payments are recognised as part
of the lease liabilities: fixed payments, variable payments that
change concurrently with changes to an index and an interest rate
based on said index or interest rate, payments overdue subject to a
residual value guarantee, exercise price of call options that it is
highly probable that Management will exercise, payments subject to
an extension option that it is highly probable that the Company will
exercise, penalty related to a termination option unless it is highly
probable that the Company will not exercise the option.
Tax
Income tax expenses consists of current tax and deferred tax for
the year, the effect on deferred tax of changes in tax rates, and
adjustments of current tax relating to previous years. Such part of
tax for the year as is attributable to items directly under statement
of comprehensive income is taken directly to this.
Current tax is calculated at the tax rate applicable for the year.
Deferred tax is measured according to the tax rules and at the tax
rates applicable by law in the respective countries at the balance
sheet date when the deferred tax is expected to materialise as
current tax.
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The lease liability is measured at amortised cost according to the
effective interest method. The lease liability is recalculated when the
underlying contractual cash flows change due to changes in an
index or an interest rate if the Company’s estimate of a residual
value guarantee changes or if the Company changes its assessment
of whether call options, extension options or termination options can
reasonably be expected to be exercised.
Current tax payable and receivable is recognised in the balance
sheet as tax computed on the taxable income for the year, adjusted
for tax on the taxable income of prior years and for tax paid on
account.
On initial recognition, the leased asset is measured at cost,
corresponding to the value of the lease liability adjusted for prepaid
lease payments plus directly related costs and estimated costs for
demolition, repairs or the like and less discounts or other types of
incentive payments received from the lessor.
Deferred tax is measured using the balance sheet liability method
on all temporary differences between the carrying amount and the
tax base of assets and liabilities. Adjustment is made to deferred
tax relating to the unrealised intra-group profits and losses.
Subsequently, the asset is measured at cost less accumulated
depreciation and impairment losses. The leased asset is depreciated
over the shorter of the lease term and the useful life of the leased
asset. Depreciation charges are recognised on a straight-line basis
in the income statement.
Deferred tax assets, including the tax value of tax deficits eligible
for carry forward, are measured at the value with which the asset is
likely to be realised either in settlement of tax on future earnings or
in settlement of deferred tax liabilities within the same legal tax
entity.
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