Gabriel_Annual_Report_2024-25 - Flipbook - Page 99
CONTENTS // CONSOLIDATED FINANCIAL STATEMENTS AND PARENT COMPANY FINANCIAL STATEMENTS // NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AND PARENT COMPANY FINANCIAL STATEMENTS
Derivative financial instruments
Derivative financial instruments are recognised and measured in the statement of financial position at fair value. Positive and negative
fair values of derivative financial instruments are included in other receivables and payables, respectively. Fair values for derivative
financial instruments are measured on the basis of current market data and acknowledged valuation methods.
Profit/loss from investments in joint ventures in the consolidated financial statements
The Group's proportionate share of the results after tax of the joint venture business is recognised in the consolidated income statement after elimination of the proportionate share of intra-group profits/losses.
Changes in the fair value of derivative financial instruments designated, and qualifying for recognition, as a hedge of the fair value
of a recognised asset or liability are recognised in the results, together with changes in the value of the hedged asset or liability as
regards the portion hedged.
Finance income and finance costs
Finance income and finance costs comprise interest income and expenditure, gains and losses as well as write-downs on payables
and transactions denominated in foreign currencies, amortisation of financial assets and liabilities and surcharges and refunds under
the on-account tax scheme etc. Realised and unrealised gains and losses on derivative financial instruments which are not designated
as hedging arrangements are also included.
Changes in the fair value of derivative financial instruments designated, and qualifying for recognition, as a hedge of future cash
flows, and which effectively hedge changes in future cash flows, are recognised in equity under a separate reserve for hedging transactions until the hedged cash flows affect the results. At this time, any gain or loss regarding such hedging transactions is transferred
from equity and recognised in the same item as the hedged item.
Dividends received from investments in subsidiaries are recognised in the parent company income statement in the financial year
when the dividends are declared. If distributed dividends exceed comprehensive income for the relevant period, an impairment test is
carried out.
For derivative financial instruments that do not qualify for hedge accounting, changes in fair value are recognised in the income statement as finance income or finance costs.
INCOME STATEMENT
Net revenue
Revenue from the sale of goods for resale and finished goods is recognised as revenue, provided that delivery and transfer of risk to
the buyer have taken place before the year end, that the income can be reliably measured, and that it is expected to be received.
Rental income is accrued and recognised on a straight-line basis over the period, in accordance with contracts entered into.
Net revenue is measured ex-VAT, taxes and discounts in relation to the sale.
The terms of payment in the Group’s sales agreements with customers depend on the product, the performance obligation and the
underlying customer relationship. Payment terms are typically 1-2 months.
The Group generally has no refund liabilities and only usual guarantee obligations on the sale of goods.
Other operating income and costs
Other operating income and costs comprise items secondary to the principal activities of the enterprise, including gains on the sale of
intangible assets and property, plant and equipment.
Public subsidies
Public subsidies comprise subsidies and financing of development projects. Public subsidies are recognised in the income statement
under other operating income in step with payment/amortisation of the costs eligible for subsidy. In the statement of financial position,
public subsidies are recognised under deferred income.
Cost of sales etc.
These costs include costs paid to achieve the year’s net revenue, including direct and indirect costs of raw materials and consumables,
goods for resale and energy etc.
Tax on profit for the year
Gabriel Holding A/S is jointly taxed with all Danish subsidiaries. The current Danish corporation tax is allocated between the jointly
taxed Danish companies in proportion to their taxable incomes (full absorption with deduction for tax losses). The jointly taxed companies are included in the on-account tax scheme.
Tax for the year comprises current tax and changes in deferred tax for the year. The tax expense relating to the profit for the year is
recognised in the income statement, and the tax expense relating to changes directly recognised in equity is recognised directly in equity.
STATEMENT OF FINANCIAL POSITION
Goodwill
Goodwill is recognised at cost on initial recognition in the statement of financial position as described under Business combinations.
Goodwill is subsequently measured at cost less cumulative impairment losses. Goodwill is not amortised.
Acquired product technology assets
Acquired product technology assets are acquired patents, technologies and trademarks in connection with the acquisition of a
business. Assets are calculated at fair value on the acquisition date using the relief from royalty method, i.e. by discounting royalty
savings through owning, rather than identifying the technology in question. Acquired product technology assets are amortised over an
expected useful life of seven to ten years.
Development projects
Development costs comprise costs, salaries and amortisation which are directly or indirectly attributable to the company’s development activities.
Clearly defined and identifiable development projects are recognised as non-current, intangible assets where there is evidence of the
degree of technical utilisation, sufficient resources and a potential future market or development opportunities in the company. The
company must intend to produce, market or use the project, the cost must be reliably measured and there must be sufficient assurance that future earnings will cover administrative, production, distribution and development costs.
Other development costs are recognised in the income statement as incurred.
The cost of sales etc. also includes direct and indirect costs of wages and consumables in connection with Group production.
Other external costs
Other external costs relate mainly to sales, distribution, maintenance, premises and administration.
Capitalised development costs are measured at the lower of cost less cumulative amortisation and impairment losses and recoverable
amount.
Following the completion of the development work, development costs are amortised on a straight-line basis over the estimated useful
life. The usual amortisation period is five years.
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