137 Cloudberry Annual report 2021 Financial statements Note 19 Impairment Impairment testing is done for assets, grouped at the lowest level for which they generate separately identifiable cash flow, when an impairment indicator is observed. This refers to assets classified as property, plant and equipment, and equity accounted investments. Goodwill is tested at least annually without regards to observed impairment indicators. Property plant and equipment Producing power plants and projects under construction are tested for impairment to the extent that indicators of impairment exist. Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal or its value in use. Cloudberry uses a discounted cash flow model to estimate the Groups value in use for this purpose. The subject for the impairment test is each individual hydro or wind power plant. There was no impairment indicator observed for property, plants and equipment and no impairment testing were performed. Investments in associated companies With application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associated companies. At each reporting date, the Group determines whether there is an impairment indicator observed which indicates the need for impairment testing. If so, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and the carrying value, and then recognises the loss as ‘Net Income(loss) from associated companies in the statement of profit or loss. The same method as for recoverable amount and value in use is used as for producing power plants/projects under construction. There was no relevant impairment indicator observed for no impairment testing were performed. Goodwill For Goodwill, the related segment is defined as the relevant segment CGU. The table shows the allocation of the total goodwill acquired in business combinations for impairment testing purposes, including to which segment the goodwill relates and the carrying value per 31 December. NOK 1 000 2021 2020 Goodwill Production 1 289 - Goodwill Develop 36 933 36 933 Total 38 222 36 933 The goodwill related to Develop origins from the acquisition of Scanergy AS in February 2020. The goodwill was determined to be related to the large pipeline of project prospects within wind on land and shallow water, the know-how and business connections (employees), the record of accomplishments over the past 10 years for the company acquired, as well as synergies. The model for impairment testing goodwill related to the Development segment is based om the same model as for impairment testing projects, which is value in use based on a discounted cash flow model. The goodwill related to Production origins from the acquisition of Selselva Kraft AS in January 2021. The goodwill was determined to be related to a potential expansion of the power plant The model for impairment testing goodwill related to the Production segment is based on the same model for value in use and a discounted cash flow model. The impairment test did not result in any impairment losses and the Groups value in use was significantly higher than the carrying amont. For information about the acquisition of Selselva Kraft see note 5 Business Combinations.
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