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 |
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.
