Gabriel_Annual_Report_2024-25 - Flipbook - Page 100
CONTENTS // CONSOLIDATED FINANCIAL STATEMENTS AND PARENT COMPANY FINANCIAL STATEMENTS // NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AND PARENT COMPANY FINANCIAL STATEMENTS
Property, plant and equipment
Land and buildings, plant and machinery, fixtures and fittings, and other plant and equipment are measured at cost less cumulative
depreciation and impairment losses.
Investments in subsidiaries in the parent company financial statements
Investments in subsidiaries are measured at cost. Where the recoverable amount is lower than cost, investments are written down to
this lower value.
Cost comprises the purchase price and any costs directly attributable to the acquisition until the date on which the asset is available
for use. The cost of self-constructed assets comprises direct and indirect costs of materials, components, suppliers, wages and salaries
as well as borrowing costs arising from specific and general borrowing directly relating to the construction of the individual asset.
A distribution of reserves other than retained earnings in subsidiaries will reduce the cost of investments when the distribution is
characterised as repayment of the parent company’s investment.
Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items which are depreciated separately.
Inventories
Inventories are measured at cost by the FIFO method. Where the net realisable value is lower than cost, inventories are written down
to this lower value.
The cost of lease assets is stated at the lower of fair value and the net present value of future minimum lease payments. When the net
present value of the future lease payments is calculated, the interest rate implicit in the lease or the incremental borrowing rate is used
as the discount factor.
Subsequent costs arising, for example, from the replacement of components of property, plant and equipment, are recognised in
the carrying amount of the relevant asset when it is probable that future economic benefits will flow to the Group. The components
replaced will no longer be recognised in the statement of financial position and the carrying amount will be transferred to the income
statement. All other ordinary costs of repair and maintenance will be recognised in the income statement as incurred.
Goods for resale, raw materials and consumables are measured at cost, comprising purchase price plus delivery costs.
Finished goods and work in progress are measured at cost, comprising the cost of raw materials, consumables, direct wages/salaries
and indirect production overheads. Indirect production costs comprise indirect materials, wages/salaries and maintenance as well as
depreciation of production equipment, buildings and equipment and factory administration and management.
The net realisable value of inventories is calculated as the sale amount less costs of completion and costs necessary to make the sale.
It is determined taking into account marketability, obsolescence and development in expected sale price.
Depreciation is provided on a straight-line basis over the expected useful lives of the assets/components as follows:
Buildings
Leasehold improvements
Plant, fixtures, fittings and equipment
Land is not depreciated.
10-50 years
Term of the lease
3-15 years
Depreciation is calculated as residual value less impairment losses. Depreciation period and residual value are determined on the
acquisition date and reassessed annually. If the residual value exceeds the carrying amount, depreciation is discontinued.
When the depreciation period or the residual value is changed, the effect on depreciation is recognised prospectively as a change in
accounting estimates.
Gains and losses on the disposal of non-current property, plant and equipment are determined as the difference between the selling
price less selling costs and the carrying amount on the date of disposal. Gains or losses are recognised in the income statement as
other operating income or other operating costs.
Impairment test of non-current assets
The carrying amount of non-current assets is tested annually for indicators of impairment. When there is an indication that assets may
be impaired, the recoverable amount of the asset is determined. The recoverable amount is the higher of an asset’s fair value less
anticipated costs of disposal and its value in use. The value in use is calculated as the net present value of forecast future cash flows
from the asset or from the cash-generating unit to which the asset belongs.
An impairment loss is recognised if the carrying amount of the net asset exceeds its recoverable amount.
Receivables
Receivables are measured at amortised cost. Impairment allowances are made using the simplified expected credit loss model, under
which the total loss is recognised immediately in the income statement at the same time as the receivable is recognised in the statement of financial position based on the expected loss over the receivable’s lifetime.
Equity
Dividends
Proposed dividends are recognised as a liability at the date on which they are approved at the annual general meeting (declaration
date). The expected dividend payment for the year is disclosed as a separate item under equity.
Translation reserve
The translation reserve in the consolidated financial statements comprises foreign exchange differences arising on translation of financial statements of foreign enterprises from their functional currencies to Danish kroner.
Current tax and deferred tax
Current tax payable and receivable is recognised in the statement of financial position as tax computed on the taxable income for the
year, adjusted for tax on the taxable income of prior years and for tax paid on account.
Deferred tax is measured using the statement of financial position liability method on all temporary differences between the carrying
amount and the tax value of assets and liabilities.
Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on the planned use of the asset
or settlement of the liability.
Investments in joint ventures in the consolidated financial statements
Investments in joint ventures are measured according to the equity method.
Investments in joint ventures are measured in the statement of financial position as the Group’s share of the enterprises’ equity values,
calculated in accordance with the Group’s accounting policies, plus or minus the proportionate share of unrealised intra-group profits
and losses and plus the carrying amount of goodwill. Investments in joint ventures are tested for impairment when there is an indication of impairment.
Deferred tax assets are recognised at the expected value of their utilisation, either as a set-off against tax on future earnings or as a
set-off against deferred tax liabilities in the same legal tax entity and jurisdiction.
Deferred tax is measured according to the tax rules and at the tax rates applicable at the date of statement of financial position when
the deferred tax is expected to crystallise as current tax. The change in deferred tax as a result of changes in tax rates is recognised in
the income statement.
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