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Welltec A/S
Notes Annual Report 2025
1. Material accounting policy information
Continued
Development projects and other intangible assets
are written down to their recoverable amounts.
Development projects in progress are tested at
least once a year for impairment.
Cost comprises the acquisition price, costs directly
The recoverable amount of intangible assets with
indefinite useful lives and development projects in
progress is estimated annually irrespective of any
recorded indications of impairment.
Profits or losses from the sale of property, plant
equipment and fleet are calculated as the diffe-
rence between selling price less selling costs and
carrying value at the time of sale. Profits or losses
are recognized in the statement of comprehensive
income if the selling price differs from the carrying
amount.
attributable to the acquisition and preparation costs
of the asset until the time when it is ready to be put
into operation. For assets manufactured and owned
by the Company, cost comprises expenses directly
attributable to the manufacturing of the asset, in-
cluding materials, components, sub-suppliers rent,
electricity and laboring costs. In the year when the
tool is completed and ready to generate income, it
is recognized under ‘Plant, equipment and fleet’.
During construction, the asset is recognized under
‘Plant, equipment and fleet under construction’.
Borrowing costs to finance the investments in de-
velopment projects are recognized in cost of these
assets if such expenses relate to qualifying assets
for which their development period last longer than
12 months.
If the asset does not generate cash flows separately
from other assets, an estimate is made of the re-
coverable amount of the smallest cash-generating
unit of which the asset forms part.
Right-of-use assets and lease liabilities
For contracts which are, or contain, a lease, the
Compnay recognizes a right-of-use asset and
a lease liability. The right-of-use asset is initial-
ly measured at cost, being the initial amount of
the lease liability adjusted for any lease payments
made at or before the commencement date. The
right-of-use asset is subsequently depreciated us-
ing the straight-line method over the lease period.
The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
remeasurements of the lease liability. The lease
liability is initially measured at the present value of
the lease payments outstanding at the commence-
ment date, discounted using Welltec’s incremental
borrowing rate. The lease liability is measured using
the effective interest method. It is remeasured when
there is a change in future lease payments, typically
due to a change in index or rate (e.g. inflation) on
property leases, or if there is a reassessment of
whether an extension or termination option will be
exercised. A corresponding adjustment is made to
the right-of-use asset, or in the income statement
when the right-of-use asset has been fully depre-
ciated. The right-of-use assets are presented in
tangible assets and the lease liabilities in non-cur-
rent and current liabilities. Lease contracts that
have a lease term of 12 months or less and low
value assets are not recognized on the balance
sheet. These lease payments are expensed on a
straight-line basis over the lease term.
The recoverable amount is calculated as the high-
er of the asset’s and the cash-generating unit’s
fair value less selling costs and net present value.
When the net present value is determined, esti-
mated future cash flows are discounted at present
value using a discount rate that reflects current
market estimates of the value of money in terms
of time, as well as the particular risks related to the
asset and the cash-generating unit, respectively,
and for which no adjustment is made in the esti-
mated future cash flows.
Other borrowing costs are included in finance ex-
penses in the statement of comprehensive income.
The basis of depreciation is cost less estimated
residual value after the end of useful life. The re-
sidual value is the estimated amount that would
be earned if selling the asset today net of selling
costs if the asset is of an age and a condition that
is expected after the end of useful life straight-line
depreciation is made on the basis of the following
estimated useful lives of the assets:
Received grants in relation to development projects
are deducted from the cost price of the capitalized
asset.
Other intangible assets
Acquired intellectual property rights in the form
of patents and licenses are measured at cost less
accumulated amortization and impairment losses.
Patents are amortized over their remaining dura-
tion, usually 20 years, and licenses are amortized
over the term of the agreement. If the actual useful
life is shorter than the remaining duration and the
term of the agreement, respectively, amortization
is made over such shorter useful life. Separable
intangible assets acquired through business com-
binations are technology. Technology is amortized
on a straight-line basis over its estimated useful
life of 10 to 20 years.
Leasehold improvements: 3-10 years
Plant, equipment and fleet: 3-10 years
Other fixtures and fittings, tools and equipment:
3-5 years
If the recoverable amount of the asset or the
cash-generating unit is estimated to be lower than
the carrying amount, the asset is written down to
this lower recoverable amount. The individual asset
is not written down to an amount that is lower than
its fair value net of estimated selling costs.
Depreciation methods, useful lives and residual
amounts are reassessed annually. Property, plant
and equipment and fleet are written down to the
lower of recoverable amount and carrying amount.
Impairment losses are recognized in the profit or
loss. In case of any subsequent reversals of impair-
ment losses resulting from change in assumptions
of the estimated recoverable value, the carrying
values of the asset and the cash-generating unit,
respectively, are increased to the adjusted estimate
of the recoverable value, however, no more than
the carrying value which the asset or the cash-gen-
erating unit would have had if the write-down had
not been performed.
Impairment of property, plant, equipment,
fleet and intangible assets
Tangible assets
Land and buildings, plant and machinery as well as
other fixtures and fittings, tools and equipment are
measured at cost less accumulated depreciation
and impairment losses. Land is not depreciated.
The carrying amounts of property, plant, equip-
ment, fleet and intangible assets with definite useful
lives are tested at the end of the reporting period
for any indication of impairment. If impaired, the
recoverable amount of the asset is estimated to
determine the need for any write-down and the
extent thereof.
