Cloudberry Annual report 2022 Financial statements 136 Note 18 Inventory Accounting principle 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. Development projects Expenses related to research activities (project opportunities) are recognised in the statement of profit or loss as they incur. Expenses related to development activities are capitalised to the extent that the project qualifies for asset recognition, the Group is technically and commercially viable and has sufficient resources to complete the development work. Asset recognition of project inventory is done when the Group has the right to explore the developing project and is in the process to enter a concession application. Before asset recognition, the projects are assessed if they meet the major key success prerequisites and 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. Capitalized development costs consists of external development costs, capitalized salaries for internal employees and capitalized interest costs related to project funding. The development projects are part of the Development business segment and are mainly held for trading. A project can be reclassified to held for own use if it is selected to be kept as a long-term producing asset. When a project is ready to build, and the Group makes the final investment decision (FID), the projects will be reclassified to property, plant and equipment and accounted according to IAS 16. Inventory per year end NOK million 31.12.2022 31.12.2021 Projects 106 154 Government grants - - Total 106 154 The table below shows the split of project inventory in projects with construction permit and project backlog. FY 2022 NOK million Projects - with construction permit Projects - Backlog Total Project inventory 01.01. 118 35 154 Acqusitions during the year 29 4 33 Capitalization (salary, borrowing cost, other expenses) 41 2 42 Realized (104) - (104) Transfer to PPE (16) - (16) Write down current year - - - Effects of movements in foreign exchange (2) - (3) Project inventory 31.12. 66 41 106
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