Cloudberry Clean Energy Annual report 2020

Cloudberry Annual report 2020 Financial statements 104 Note 18 Inventory Inventory consists of the capitalized costs related to development projects and inventory of government grants of el-certificates and guarantees of origin. NOK 1 000 2020 2019 Projects 196 021 - Government grants 8 - Total 196 028 - The table shows the split of project inventory in projects with construction permit and project backlog. The main projects with construction permit are the wind projects: Hån, Duvhallen and the shallow water project Rewind Vänern. The backlog is a significant and risked project pipeline of exclusive projects in Norway and Sweden within hydro and wind. Included in the carrying amount is capitalized external cost related to the project, salary to employees working with project development and borrowing costs. NOK 1 000 Projects - with construction permit Projects - Backlog Total Project inventory 01.01 - - - Acqusitions during the year 154 737 32 812 187 549 Capitalization (salary, borrowing cost, other expenses) 7 800 672 8 472 Realized - - - Transfer to PPE - - - Write down current year - - - Project inventory 31.12. 162 537 33 484 196 021 Capitalised costs in 2020 consist of NOK 1.7m in borrowing costs, NOK 2.0m in salaries and NOK 4.8m in external fees. The capitalisation rate applied for borrowing costs is 3.2%. Power plants under development Expenses related to research activities (project opportunities) are recognised in the statement of profit or loss as they incur. Expenses related to development activities (backlog) are capitalised to the extent that the project qualifies for asset rec- ognition, the Group is technically and commercially viable and has sufficient resources to complete the development work. For Cloudberry asset recognition of project inventory is done when Cloudberry has a contract with a land- owner which gives Cloudberry the exclusive right to continue developing the project and enter a con- cession application process. Before contract signing and asset recognition, the projects is assessed if it meets the major key success prerequisites and it must also meet the criteria for expected future economic benefits, either from a project sale or from an in-house owned power producing power plant. The development projects are part of the Develop business segment and are mainly held for trading. A project can be reclassified to held for own use if it is selected to keep as long term producing asset. When a project is ready to build, and Cloudberry makes the final investment decision (FID), the projects will be reclassified to Property, plant and equipment and transferred to Cloudberry Production and owned/managed in this business area. The Production business owns producing assets, these assets are long term assets which are held for power production. These assets are accounted according to IAS 16 Property plant and equipment.