Note 12 Intangible assets and tangible assets

SEK M Goodwill Brands Capitalized development costs Customer relationships Intangible assets, other Total
Mkr Goodwill Varumärken Balanserade utvecklings-kostnader Kund-relationer Immateriella tillgångar, övrigt Summa
INTANGIBLE ASSETS IMMATERIELLA TILLGÅNGAR
Cost, Jan 1‚ 2019 Anskaffningsvärde
2019-01-01
5,395 731 768 819 1,719 9,432
Investments Investeringar 70 1 159 231
Sales/disposals Försäljningar/utrangeringar 0 -15 -15
Reclassifications Omklassificeringar 4 4
Translation differences Omräkningsdifferenser 195 5 15 48 26 289
Accumulated cost‚ Dec 31‚ 2019 Ackumulerade anskaffningsvärden
2019-12-31
5,590 736 853 868 1,893 9,941
Amortization and impairment,
Jan 1‚ 2019
Av- och nedskrivningar 2019-01-01 -136 -419 -436 -542 -953 -2,486
Amortization for the year Årets avskrivningar -40 -62 -36 -147 -286
Impairment Nedskrivningar -6 -6
Sales/disposals Försäljningar/utrangeringar 15 15
Translation differences Omräkningsdifferenser -41 -2 -8 -35 -20 -105
Accumulated amortization and impairment‚ Dec 31‚ 2019 Ackumulerade av- och nedskrivningar 2019-12-31 -178 -461 -512 -613 -1,105 -2,869
Closing carrying amount, Dec 31‚ 2019 Utgående redovisat värde 2019-12-31 5,413 275 341 255 788 7,072
SEK M Goodwill Brands Capitalized development costs Customer relationships Intangible assets, other Total
Mkr Goodwill Varumärken Balanserade utvecklings-kostnader Kund-relationer Immateriella tillgångar, övrigt Summa
INTANGIBLE ASSETS IMMATERIELLA TILLGÅNGAR
Cost, Jan 1‚ 2018 Anskaffningsvärde 2018-01-01 4,990 733 706 835 1,649 8,913
Investments Investeringar 60 137 197
Acquisitions Förvärv 192 12 204
Sales/disposals Försäljningar/utrangeringar -8 -94 -102
Reclassified to assets held for sale Omklassificerade till tillgångar som innehas för försäljning 47 -17 -49 -3 -22
Translation differences Omräkningsdifferenser 166 15 10 33 18 242
Accumulated cost‚ Dec 31‚ 2018 Ackumulerade anskaffningsvärden
2018-12-31
5,395 731 768 819 1,719 9,432
Amortization and impairment,
Jan 1‚ 2018
Av- och nedskrivningar
2018-01-01
-128 -390 -365 -512 -884 -2,279
Amortization for the year Årets avskrivningar -38 -77 -38 -128 -281
Impairment Nedskrivningar -24 -24
Sales/disposals Försäljningar/utrangeringar 8 91 99
Reclassified to assets held for sale Omklassificerade till tillgångar som innehas för försäljning 11 23 2 36
Reclassifications Omklassificeringar 5 -1 -4
Translation differences Omräkningsdifferenser -8 -7 -1 -15 -6 -37
Accumulated amortization and impairment‚ Dec 31‚ 2018 Ackumulerade av- och nedskrivningar 2018-12-31 -136 -419 -436 -542 -953 -2,486
Closing carrying amount, Dec 31‚ 2018 Utgående redovisat värde 2018-12-31 5,259 312 332 277 766 6,946
SEK M Buildings and land1) Plant and machinery Equipment, tools, fixtures and fittings Rental equipment Construction in progress Total
Mkr Byggnader och mark1) Maskiner och andra tekniska anläggningar Inventarier, verktyg och installationer Utrustning
för uthyrning2)
Pågående nyanläggningar Summa
TANGIBLE ASSETS MATERIELLA ANLÄGGNINGSTILLGÅNGAR
Cost, Jan 1‚ 2019 Anskaffningsvärde 2019-01-01 345 240 821 4,111 32 5,549
Investments Investeringar 5 12 56 423 24 519
Sales/Disposals Försäljningar/Utrangeringar -5 -14 -486 -1 -506
Reclassifications Omklassificeringar 20 -20 41 -9 -36 -4
Translation differences Omräkningsdifferenser 16 11 27 162 1 217
Accumulated cost, Dec 31‚ 2019 Ackumulerade anskaffningsvärden 2019-12-31 387 237 930 4,200 19 5,772
Depreciation and impairment, Jan 1‚ 2019 Av- och nedskrivningar
2019-01-01
-152 -170 -649 -3,425 -4,396
Depreciation for the year Årets avskrivningar -13 -14 -71 -280 -379
Sales/Disposals Försäljningar/Utrangeringar 2 14 443 459
Reclassifications Omklassificeringar -4 15 -12 1 0
Translation differences Omräkningsdifferenser -7 -8 -22 -128 -166
Accumulated depreciation and impairment, Dec 31‚ 2019 Ackumulerade av- och nedskrivningar 2019-12-31 -176 -176 -741 -3,389 -4,482
Closing carrying amount, Dec 31‚ 2019 Utgående redovisat värde 2019-12-31 210 62 189 811 19 1,292
1) Of which, land amounted to SEK 10 M in 2019.

2) These assets primarily comprise beds and mattresses.

SEK M Buildings and land1) Plant and machinery Equipment, tools, fixtures and fittings Rental equipment Construction in progress Total
Mkr Byggnader och mark1) Maskiner och andra tekniska anläggningar Inventarier, verktyg och installationer Utrustning
för uthyrning2)
Pågående nyanläggningar Summa
TANGIBLE ASSETS MATERIELLA ANLÄGGNINGSTILLGÅNGAR
Cost, Jan 1‚ 2018 Anskaffningsvärde 2018-01-01 363 216 748 3,881 31 5,239
Investments Investeringar 5 18 53 325 44 445
Acquisitions Förvärv 3 3
Sales/Disposals Försäljningar/Utrangeringar -1 -17 -292 -1 -311
Reclassified to assets held for sale Omklassificerade till tillgångar som innehas för försäljning -34 -25 -5 -2 -66
Reclassifications Omklassificeringar 24 17 -41
Translation differences Omräkningsdifferenser 11 5 25 197 1 239
Accumulated cost, Dec 31‚ 2018 Ackumulerade anskaffningsvärden 2018-12-31 345 240 821 4,111 32 5,549
Depreciation and impairment, Jan 1‚ 2018 Av- och nedskrivningar
2018-01-01
-147 -173 -581 -3,204 -4,105
Depreciation for the year Årets avskrivningar -15 -14 -63 -290 -382
Sales/Disposals Försäljningar/Utrangeringar 1 15 221 237
Reclassified to assets held for sale Omklassificerade till tillgångar som innehas för försäljning 15 19 4 38
Reclassifications Omklassificeringar -2 2 0
Translation differences Omräkningsdifferenser -5 -3 -22 -154 -184
Accumulated depreciation and impairment, Dec 31‚ 2018 Ackumulerade av- och nedskrivningar 2018-12-31 -152 -170 -649 -3,425 -4,396
Closing carrying amount, Dec 31‚ 2018 Utgående redovisat värde 2018-12-31 193 70 172 686 32 1,153

1)Of which, land amounted to SEK 10 M in 2018.

2) These assets primarily comprise beds and mattresses.

Impairment testing

2019 2018
2019 2018
Goodwill and intangible assets with an indefinite useful life Goodwill och immateriella tillgångar med obestämbar nyttjandeperiod 5,461 5,314

Arjo has only one cash-generating unit and, accordingly, goodwill and intangible assets with an indefinite useful life are tested for impairment based on the Group’s total amount.

Goodwill and other net assets are tested for impairment annually and whenever conditions indicate that impairment may be necessary. The recoverable amount for the cash generating unit is based on the calculated value in use. The operating segment, corresponding to Arjo in its entirety, was tested for impairment, and it is at this level that goodwill is monitored.

Assumptions

The value in use of goodwill and other net assets attributable to Arjo was calculated based on discounted cash flows. A discount rate of 8.3% (8.7) before tax was applied when calculating the value in use. Arjo bases the calculation on attained earnings, forecasts, business plans, financial forecasts and market data. Cash flow for the first three years is based on a strategic plan established by the Arjo Management Team. Future cash flow has then been assumed to have a growth rate corresponding to 2% (2). This growth rate is based on the going concern assumption and does not exceed long-term growth for the industry as a whole. Based on the assumptions given above, the value in use exceeds the carrying amount of the cash generating unit.

Sensitivity analysis

Sensitivity analyses of changes in growth rates and the discount rate, which have a significant impact on the calculation of the discounted cash flows, were performed in connection with impairment testing. The sensitivity analyses revealed that the negative changes below would not individually lead to an impairment requirement.

  • Growth rate after year five decreases to 1% (1).
  • Discount rate before tax increases by 1 percentage point to 9.3% (9.7).

Intangible assets

There are a limited number of intangible assets, in the form of trademarks with a carrying amount of SEK 47 M (44), for which the useful life has been assessed as indefinite. For these trademarks, there is no foreseeable limit for the time period during which the trademarks are expected to generate net revenue for Arjo. The useful life for other intangible assets is three to 15 years. For strategic acquisitions, the useful life exceeds five years.