139 Cloudberry Annual report 2022 Financial statements The Group is of the view that no reasonable possible change in the key assumptions listed above would cause the carrying value to materially exceed the recoverable amount for the CGU. No impairment loss was recognised as the recoverable amounts exceed the carrying amount. Goodwill related to Development 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 of 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 impairment test is sensitive to the following key assumptions: · future cash flows with price per MW/GWh for development projects · Timing of project development and concession grant, · Applied discount rate of 12% The Group is of the view that no reasonable possible change in the key assumptions listed above would cause the carrying value to materially exceed the recoverable amount for the CGU. No impairment loss was recognised as the recoverable amounts exceed the carrying amount. 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 of 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 Group’s value in use was significantly higher than the carrying amount. Impairment test of other assets Property plant and equipment (producing and under construction power plants) The Group uses an internal valuation model based on external input as the impairment indicator for PPE. This model makes use and combines the most relevant internal and external input factors, such as long-term power price estimates, interest rate level, tax and regulatory changes and asset performance. For the majority of the producing power plants there was no impairment indicator observed and no further impairment testing to calculate recoverable amount for the remaining power plants was performed. The impairment indicator applied was based on updated long-term power prices, the new tax proposal that was announced in September 2022 and increased interest rate levels. When taking the new tax proposal into consideration (see section below), the only asset that would need further impairment testing was Røyrmyra wind farm. An external valuation was nevertheless not preformed because the crucial factor was the new tax proposal. Since this is not finally voted on, the Group awaits the final outcome (expected during summer 2023) before a new assessment and impairment test is performed. For one other producing power plant asset, the assessment of observed impairment indicator was sensitive to changes in estimates and assumptions and close to having an impairment indicator. If future interest rate increase or long-term power price decrease the asset must be tested for impairment New Norwegian tax proposal In September 2022 the Norwegian government proposed several new tax proposals for the power producing industry. With respect to land-based wind farms (both existing and new) which are subject to license requirement and hydropower plants with an installed effect of minimum 1 MW, the Norwegian government proposed to introduce a high price contribution tax levied on energy sold at a price above NOK 0.70/kWh at a rate of 23%, with effect from 1 January 2023. The high price contribution tax is not expected to be deductible in the calculation of corporate income tax or resource rent tax and expected only to be in effect until the end of 2024.
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