Note 30 Correction of error The Group's Norwegian subsidiary Fiven Norge AS has historically entered into contracts to secure the power prices charged to the plants in Lillesand and Arendal. Power is a significant cost of production, and the purpose has been to minimize the exposure to significant fluctuations in power prices. As these contracts have been in place for some time, it has been the understanding that the underlying contract was a supply agreement for power at a set price, and as such own-use exemption has been applied as per IFRS 9.2.4 and therefore treated as an executory contract only. As a consequence of planned plant maintenance shutdown in 2022 excess power capacity was sold, further investigation revealed that there was a portion of excess volume not sold, and the there was no delivery at a contract price, rather it was a secondary part of the contract for the delta between an agreed price compared to the spot price, i.e., a contract for difference (CfD). A CfD is an agreement wherein two parties agree to pay or receive in cash the difference between the spot price and the fixed price on an underlying item, without actual delivery or receipt of that underlying item, i.e., there is no physical delivery of the non-financial item (in this case, power). This element of the contract is settled in cash and is precluded from qualifying for the own-use exemption, despite the linkage to the notional volume of the CfD to the physical energy flow under the contract to buy electricity. It is therefore to be accounted for in accordance with IFRS 9 and recognized as a derivative with gains (losses) through profit or loss. The CfD is a derivative, meeting the definition of IFRS 9.A, and will be classified as a financial asset or liability depending on the fair value. The CfD are measured at fair value through profit or loss. Power contracts in Fiven Norway AS has been revisited, and an assessment made regarding need to restate. All effects related to the correction of error is recognized through profit or loss in 2021. Errors related to periods prior to 2021 is considered to be immaterial and total effect is corrected in 2021. After the correction the derivative with gain and (losses) is presented in Other gains and losses in the statement of income. The error has been corrected by restating each of the affected financial statement line items for the prior periods, as follows: IMPACT ON STATEMENT OF INCOME Amounts in EUR thousand 31 Dec 2021 Statement of income Other gains and losses 5 699 Income tax (benefit) expense (1 254) Net impact on Net income (loss) 4 446 IMPACT ON STATEMENT OF FINANCIAL POSITION Amounts in EUR thousand 31 Dec 2021 ASSETS Other non-current assets 1 154 Other current financial assets 4 546 TOTAL ASSETS 5 699 Deferred tax liabilities 1 254 Total liabilities 1 254 Net impact on Net income (loss) 4 446 Fiven Annual Report 2022 Financial statements 77
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