Cloudberry Clean Energy Annual report 2020

Cloudberry Annual report 2020 Financial statements 88 Critical accounting principles that can lead to differences in accounting: 1. Amortisation of Goodwill The Group has chosen to implement IFRS for all its acquisitions as from 1 January 2019 by apply- ing the transitional rule in IFRS 1. As a result of this, it is no longer permitted to amortise goodwill as of 1 January 2019, and goodwill is instead tested annually for impairment. This is different from NGAAP. The Group did not report any amortisation of Goodwill in the annual accounts in the period and hence there is no difference recognised. 2. Dividend According to IFRS, the proposed dividend is an equity item, not a liability, while according to NGAAP, proposed dividend is a liability. It was not proposed any dividend in the conversion balance sheets, and therefor there was not recognised any difference in reported equity or liability. 3. Financial investment All financial investments are assessed at their fair value according to IFRS. No such items were recognised. 4. Recognition of derivatives According to NGAAP financial derivatives outside hedge accounting were to be valued at the lower of historical cost and the fair value. According to IFRS 9, financial derivatives are to be recognised in the balance sheet at fair value, with fair value changes recognised in the statement of profit and loss when no hedge accounting is applied. The Group did not have any such items and hence there was not recognised any difference in the conversion. 5. Leases According to IFRS 16, all lease contracts shall be recognised in the balance sheet, with a right to use asset and a lease obligation at the starting point of the lease contract. Exception from this rule is that short term lease contracts (under 12 months), low value leases and leases with a variable amount does not need to be recognised. Lease costs reported under NGAAP are recog- nised in the profit and loss statement as they incur. The lease costs recognised in the Groups accounts in the conversion period were related to short term lease of office rent, and the applied accounting according to NGAAP with costs recognised over the profit and loss statement is the same as accounted for under IFRS when applying the exception for short term leases. 6. Transaction costs from business combinations According to IFRS 3 acquisition related costs should be expensed as incurred, while according to NGAAP these have been capitalised. No such costs have incurred in the period and therefor no difference is recognised. 7. Income tax In the PPA for business combinations, deferred tax shall be recognized in nominal values. Discounting deferred tax is not permitted under IFRS but is permitted under GRS [IAS 12.53]. In addition, deferred tax assets shall be pre- sented separately in the balance sheet if the amount is material. It is not presented as part of the line “intangible assets”. Under GRS, the deferred tax asset is presented as intangible assets. No tax asset was recognised in the balance sheet and hence there was no difference in the conversion. 8. Revenue recognition The basic principle of IFRS 15 is that companies shall recognize revenues in such manner that the consideration is recognized according to a pattern that reflects the transfer of goods or ser- vices to the customer. The standard introduces a detailed framework for determining when and how revenue from contracts with customer should be accounted for. The framework is illustrated using a five-step mode. According to NGAAP revenue shall be accounted for at fair value of the consideration and the time of the transaction date, and according to when the revenue is earned. When comparing the revenue recognition according to IFRS and NGAAP there was not discovered any differences in accounting and hence no differences was recognised.