Cloudberry Annual report 2021 Financial statements 102 and GoO are granted, they are measured at cost and classified as other income and inventory. Cost of government grants is zero. Upon subsequent sales, the sales price is recognised within sales revenues. Share-based compensation Cloudberry has an equity incentive plan for top management and key employees. The programme includes the issue of warrants for shares in the company. The warrants-scheme is accounted for and reported in accordance with IFRS 2. The renumeration is share-based. The fair value of the warrants is measured at grant date using an appropriate valuation model. In Cloudberry the Black and Scholes model is applied based on the market price to determine the fair value at the grant date. The grant date is determined by the Board of Directors. The fair value of the warrants is recognised as a personnel expense over the duration period, at the same time a corresponding increase in paid in equity is recognised. On each balance date, the Group revises its estimates of the number of warrants that are expected to be exercisable. Any adjustments will be recognised in the income statement and corresponding adjustment to equity. Employer tax is recognised in the profit and loss statement and a provision is recognised in the balance sheet. Inventory Cloudberry inventories consist of development projects and government grants of el-certificates and guarantees of origin (GoO). Inventories are accounted for in accordance with IAS 2 Inventories. According to IAS 2 inventories are measured at the lower of cost and net realisable value. Government grants of el-certificates and GoO are at granting measured and recognised at cost to inventory. Cost of government grants is zero. The develop projects are part of the Develop business segment and are mainly held for trading. In some cases, when a project is ready to build, Cloudberry decides to keep the project to build and own a producing power plant. When Cloudberry makes the final investment decision (FID), the project will be reclassified from inventory to property plant and equipment and power plant under construction. From the point of FID until the project constructed and is a finished and operating power plant it is evaluated when the timing is right for the project to be acquired by the Production segment. Producing power plants are owned and managed in the Production business area. Property, plant and equipment (PPE) Property, plant, and equipment is measured at historical cost less accumulated depreciation and accumulated impairment losses. Land is not depreciated. The initial cost of a PPE asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of asset retirement obligation if any, and for qualifying assets, borrowing costs incurred in the construction period. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. If a separate component is damaged and replaced, the component is derecognised and the carrying amount is charged to the profit and loss statement as an impairment loss in the period. The replacement component is capitalized as a new item of PPE. Each component of an item of property plant and equipment with a cost that is significantly in relation to the total cost of the item is depreciated separately. Depreciation is calculated using the straightline method to allocate costs over their estimated useful lives. Depreciation of hydro and wind power plants commences when the plant is ready for managements intended use, normally at the date of the grid connection and commissioning. The depreciation period is adapted to the duration of the landowner contract period. The assets’ residual values and useful lives are reviewed annually and adjusted if appropriate. Gains and losses on disposals are determined by comparing actual proceeds with the carrying amount. Gains and losses on disposal are included in profit or loss. Capitalisation of borrowing costs Capitalisation of borrowing costs commence when the activities to prepare the asset for its intended use are undertaken and continue to be capitalized until the date in which the development of the relevant asset is complete. All other borrowing costs are recognised in the profit and loss statement in the period which they incur.
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