Cloudberry Annual report 2021 Financial statements 100 Equity accounted investments are reviewed each period to determine whether there is any objective evidence that the net investment is impaired. Goodwill relating to the associated company is included in the carrying amount of the investment and is not tested for impairment separately. Transactions with non-controlling interests Transactions with non-controlling interests, without loss of control, are accounted for as equity transactions. When acquiring shares from a non-controlling interest the difference between the consideration and the shares proportionate value of recognized net assets in the subsidiary as correction of equity in the parent company owners. Business combinations In order to consider an acquisition as a business combination, the acquired asset or group of assets must constitute a business, an integrated set of operations and assets conducted and managed for the purpose of providing a return to the investors. Acquired businesses are included in the financial statements from the transaction date. The transaction date is defined as the date of which the company achieves control over the financial and operating assets. Comparable figures are not adjusted for acquired, sold, or liquidated businesses. The acquisition method is used to account for all business combinations. The consideration is measured at the fair value of any transferred assets, liabilities or issued equity instruments. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. If the consideration transferred (including any non-controlling interests and the fair value of previous assets) exceeds the fair value of identifiable net assets acquired, this is recognised as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase gain. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss. Goodwill is not depreciated but tested at least annually for impairment. In connection with this, goodwill is allocated to the cash-generating units (CGUs) or groups of CGUs that are expected to benefit from the synergy effect of the acquisition. In accordance with IFRS 3, the estimation of fair value and goodwill may be adjusted up to 12 months after the takeover date if new information has emerged about the facts and circumstances that existed at the time of takeover. The Group makes use of the opportunity to adjust the initial purchase price allocation if necessary. Acquisition-related costs, except costs related to issue of debt or equity securities, are expensed as incurred. Segment Business segments are reported in a manner consistent with how the Group internally follows up the business. The Group’s segment financials are reported on a proportionate basis. The key differences between the proportionate and the consolidated IFRS financials are that associated companies are included in the financial accounting lines, the profit or loss statement and share of assets and net debt, with the respective proportionate ownership share, while in the consolidated financials associated companies are consolidated with the equity method. This is how the internal financial reporting to the Group’s chief operating decision maker, defined as the Executive Management team, is prepared. The business segments are determined based on the differences in the nature of their operations. Cloudberry manages its operations in three segments, production, development and corporate. After the acquisition of Captiva in January 2022, a fourth business segment, operations (representing the Captiva business ) will be established and reported on from 2022. Foreign currency translation Functional and presentation currency The Group’s consolidated financial statements are presented in NOK, which is also the parent Company’s functional currency. For each entity, the Group determines the functional currency, and items
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