Note 14

Intangible non-current assets

2019-03-31
Intangible assets acquired Intangible assets developed in the Group
Group Goodwill Supplier relationships, customer relationships and technology Trademarks Capitalised R&D expenses Leases (rental) and similar rights Software Software Total
Accumulated cost
Opening balance 1,456 1,633 22 19 0 70 4 3,204
Acquisition of companies 305 311 21 7 644
Investments 18 1 4 23
Disposals and retirement of assets -6 -7 0 -13
Reclassifications 2 2
Translation effect for the year 12 15 0 0 0 27
Closing balance 1,767 1,970 22 41 0 83 4 3,887
Accumulated amortisation
Opening balance -656 0 -16 0 -65 -4 -741
Acquisition of companies -14 -4 -18
Amortisation -168 -2 0 -3 -173
Disposals and retirement of assets 3 0 3
Translation effect for the year -5 0 0 0 -5
Closing balance -826 0 -32 0 -72 -4 -934
Carrying amount at year-end 1,767 1,144 22 9 0 11 0 2,953
Carrying amount at start of year 1,456 977 22 3 0 5 0 2,463
2018-03-31
Intangible assets acquired Intangible assets developed in the Group
Group Goodwill Supplier relationships, customer relationships and technology Trademarks Capitalised R&D expenses Leases (rental) and similar rights Software Software Total
Accumulated cost
Opening balance 1,101 1,268 22 18 0 65 4 2,478
Acquisition of companies 315 321 2 638
Investments 2 1 2 5
Disposals and retirement of assets -1 -3 0 -4
Translation effect for the year 41 45 0 0 1 87
Closing balance 1,456 1,633 22 19 0 70 4 3,204
Accumulated amortisation
Opening balance -507 0 -15 0 -60 -4 -586
Acquisition of companies -2
Amortisation -134 -1 0 -2 -137
Disposals and retirement of assets 2 0 2
Translation effect for the year -17 0 0 -1 -18
Closing balance -656 0 -16 0 -65 -4 -741
Carrying amount at year-end 1,456 977 22 3 0 5 0 2,463
Carrying amount at start of year 1,101 761 22 3 0 5 0 1,892

Testing of goodwill 

The Group’s recognised goodwill amounts to SEK 1,767 million (1,456), allocated as above to the units where impairment testing is performed. Goodwill is not monitored internally at a level lower than the business areas, and impairment testing is therefore performed at that level. The business areas coincide with the Group’s operating segments. Impairment testing took place most recently in March 2019. 

 

The recoverable amount was based on value in use, calculated from a current estimate of cash flows over the year ahead. Forecast earnings and investments in working capital and non-current assets for the next financial year, 2019/2020, are based on previous outcomes and experiences. The forecast is produced on the basis of a relatively detailed budgeting process for the various parts of Group. The major components of the cash flow are sales, the various operating costs and investments in working capital and non-current assets. 

 

The sales forecast is based on judgements taking into account factors such as order bookings, the general economy and the market situation. The forecast for operating costs is based on current pay agreements and previous years’ levels of gross margins and overheads, adapted to expectations for the year ahead taking into account factors as referred to for the sales forecast. Anticipated investments in working capital and non-current assets are linked to the growth in sales. 

 

Since the operations are deemed to be in a phase that is representative of the long-term perspective, the cash flow from the first forecast year is extrapolated by a long-term growth rate of 2 percent (2) per year for all business areas. Cash flows were discounted applying a weighted cost of capital corresponding to roughly 10 percent (10) before tax. The key assumptions that have the greatest effect on the recoverable amount are gross margin, discount rate and long-term growth rate, where gross margin is most important. Neither a 1-percent increase in the discount rate, a 1-percentage point de-crease in long-term growth, nor a 1-percent decrease in the margin shows a need for impairment. These calculations show that value in use significantly exceeds the carrying amount. Consequently, impairment testing indicated no impairment. The margin for impairment is considerable for all business areas and it is not judged that any possible changes in important assumptions that may reasonably expected to lead to impairment. 

 

Other impairment testing 

Each year, trademarks are tested for impairment, applying the same policies as for goodwill. No events or changes in circumstances were identified that would motivate impairment testing for other intangible non- current assets that are amortised. 

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