1. Accounting policies - continued -
Notes to the Financial Statements
1.6 Net financials
Net financials comprise interest, realised and unrealised capital gains and losses concerning financial assets and
liabilities, amortisation of financial assets and liabilities, additions and reimbursements under the Danish tax
prepayment scheme, etc. Financial income and expenses are recognised in the profit and loss account with the amounts
that concerns the financial year.
1.7 Intangible assets
Finalized development projects
Patents and development costs recognised in the balance sheet are measured at cost less accrued amortization and
writedowns for impairment. Development projects are amortized according to the straight-line method over their
estimated useful lives from the time when the asset is ready for use. Patents and finalized development projects are
amortized over 15 year based on the remaining lifetime of the patent. Amortization methods, useful years and residual
values are reviewed every year.
Gain and loss from the sale of development projects, patents, and licenses are measured as the difference between the
sales price with deduction of sales costs and the book value at the time of the sale. Gain or loss are recognised in the
profit and loss account as other operating income or other operating expenses respectively.
1.8 Right-of-use assets
The Company assesses whether a contract is or contains a lease at inception of the contract. The Company recognizes
right-of-use assets and corresponding lease liabilities at the lease commencement date, except for short-term leases
and leases of low value. For these leases, lease payments is recognized as an operating expense on a straight-line basis
over the term of the lease.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liabilities adjusted for
any lease payments made at or before the commencement date, plus initial costs incurred.
The right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses. The
right-of-use assets are from the commencement date depreciated over the shorter period of lease term and useful life
of the underlying asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of
the Company's corresponding assets such as property, plants and equipment. In addition, right-of-use assets are
periodically reduced by impairment losses, if any, and adjusted in accordance with lease liabilities.
The lease liabilities are initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate.
Lease payments included in the measurement of the lease liabilities comprise the following:
-
-
-
-
Fixed payments.
Variable payments, dependent on an index or rate.
The exercise price of a purchase option if it is reasonably certain that the option will be exercized.
Amounts expected to be payable under residual value guarantees.
The lease liabilities are subsequently measured at amortized cost using the effectiv interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
estimate of the amount expected to be payable under a residual value guarantee, or if management changes its
assessment of whether it will exercise a purchase, extension or termination option.
When the lease liabilities are remeasured in this way, a corresponding adjustment is made to the carrying amount of
the right-of-use assets, or is recorded in profit or loss if the carrying amount of the right-of-use assets has been reduced
to zero.
13
