Asset Buyout Partners Annual Report 2020

Business combinations vs acquisition of assets The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of assets. The Group accounts for an acquisition as a business combination where an integrated set of activities are acquired in addition to the property. More specifically, consideration is made of the extent to which significant processes are acquired and, in particular, the extent of services provided by the subsidiary (e.g., maintenance, cleaning, security, bookkeeping, etc.). When the acquisition of subsidiaries does not represent a business, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognized. All acquisitions made up until the balance sheet date have been considered acquisition of a group of assets and liabilities. Operating lease contracts – the Group as lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases. Fair value of financial liabilities The fair value of the interest rate swaps is calculated by banks and is determined based on the net present value of future cash flows using quoted interest rate curves at the balance sheet date. See also note 3. Note 6 Segment information ABP is an industrial real estate company with a dedicated investment strategy aimed towards real estate and infrastructure assets located in energy and maritime clusters. There are no material differences in risks and returns in the economic environments in which the Company operates. Consequently, the Company is only present in one business segment and one geographic market, and no further segment information has been prepared. The segment presentation in the financial statements matches ABP’s internal operational monitoring as it is reviewed by management and the Company’s stakeholders. Asset Buyout Partners | Annual Report 2020 30