Intangible assets Goodwill
performance obligations, and to determine and distribute the transaction price for each performance obligation. Revenues are reported when the performance obligation according to the agreement is fulfilled and the customer has gained control of the service. Revenue is reported over time if the customer receives or consumes the benefits at the same time as the service is performed. Where the termof the agreement is not stated, the average termof the service used is based on historical information. Revenue is measured at the agreed transaction price, less any discounts and value added tax. Sale of services – Property listings Revenue from property listings and related value-added services is accrued over the average historical duration of a listing. Sale of services – Advertising Revenue from advertising is reported over the period in which the advertising campaign is published on Hemnet.se and in Hemnet’s apps, either in line with the delivery of agreed page views or over the term of the agreement, depending on what is applicable.
Goodwill with an indefinite life is not amortised on an ongoing basis but is tested for impairment annually and also as soon as indications arise that the asset in question has decreased in value. Goodwill arises from the acquisition of subsidiaries and refers to the amount by which the purchase price, any non-controlling interest in the acquired company and the fair value per acquisition day of the former equity interest in the acquired company, exceeds the fair value of identifiable acquired net assets. In order to test for impairment, goodwill acquired in a business combination is distributed to cash-generating units or groups of cash- generating units that are expected to benefit from synergies from the acquisition. Each unit or group of units that goodwill has been allocated to corresponds to the lowest level in the Group at which the goodwill in question is monitored in internal control. Goodwill is currently monitored for the Group as a whole since the Group is judged to be one cash-generating unit, which is one segment. Goodwill depreciation is tested annually or more frequently if events or changes in circumstances indicate a possible value decrease. The carrying amount of the cash-generating unit to which the goodwill was attributed (the Group as a whole) is compared with the recoverable amount, which is the higher of the value in use and the fair value minus selling costs. Any depreciation is accounted for immediately as an expense and is not put back. Customer relationships that were acquired as part of a business combination (see Note G13 Intangible assets for details) are recognised at fair value at the acquisition date and amortised on a straight-line basis over the forecasted useful lives corresponding to the estimated time they will generate cash flow. The useful lives are 10 and 20 years respectively. Platform Platforms acquired as part of a business combination (see Note G13 Intangible assets for details) are recognised at fair value at the acquisition date and are amortised on a straight-line basis over the projected useful life, corresponding to the estimated time they will generate cash flow. The useful life is 5 years. Trademarks Trademarks acquired as part of a business combination are reported at fair value on the acquisition date (see Note G13 Intangible assets for details). As long as trademarks are used, maintained and invested in, they have been assessed to have an indefinite useful life and are reported at cost and are impairment. Capitalised development costs Maintenance costs are expensed as incurred. Expenditures on development work that is directly attributable to the development and testing of identifiable and unique software that is controlled by the Group, are recognised as intangible assets when the following criteria are met: Other intangible assets Customer relationships • it is technically possible to complete the software development as well as products associated with it so it can be used, • the company's intention is to complete the software and to use or sell it, • there are prerequisits for using the software and associated products, • it can be shown that the software generates probable future economic benefits, • adequate technical, financial and other resources for completing the development and for using the software and related products are available, and • the expenses associated with the software during its development can be reliably calculated. Other development expenses, which do not meet these criteria, are expensed as incurred. Development costs that were previously expensed are not reported as an asset in a subsequent period. Expenses for development work reported in the balance sheet are entered at cost minus accumulated amortisation and any impairment losses. The useful life is 3 years.
G1 G2 G3 G4 G5 G6 G7 G8 G9
See Note G3 Revenue from contracts with customers.
G10 G11 G12 G13 G14 G15 G16 G17 G18 G19 G20 G21 G22 G23 G24 G25 G26 G27 G28 G29
Financial income and expenses Financial income consists of interest income which is recognised in revenue using the effective interest method. When the value of a receivable in the category of loan receivables and accounts receivable has decreased, the Group reduces the carrying amount to its recoverable amount, that is estimated future cash flow, discounted with the original effective interest rate for the instrument, and continues to dissolve the discount effect as interest income. Interest income on impaired loans and accounts receivable is recognised at the original effective interest rate. Financial expenses consist of interest expenses on borrowing and other financial expenses. Borrowing costs are recognised in the income statement using the effective interest method. Other financial costs include bank charges. Exchange rate gains and losses are reported net. The effective interest rate is the interest rate that discounted the estimated future cash flows during the expected termof a financial instrument to the net asset value of the financial asset or liability. The calculation includes all fees paid or received that are part of the effective interest rate. Taxes The tax expenses for the period include current and deferred tax. Tax is recognised in the statement of comprehensive income, except when the tax relates to items that are recognised in other comprehensive income or directly in equity. In such cases, the tax is also recognised in other comprehensive income and equity. Management regularly evaluates the claims made in self-assessments regarding situations where applicable tax rules are subject to interpretation. Tax liability is reported, when deemed appropriate, for amounts that are likely to be paid to the tax authority. Deferred tax is recognised, according to the balance sheet method, on all temporary differences that arise between the tax value of assets and liabilities and their reported values in the Group financial statements. However, deferred tax liability is not recognised if it arises as a result of the initial recognition of goodwill. Deferred tax is also not recognised if it arises as a result of a transaction that constitutes the first recognition of an asset or liability that is not a business combination and which, at the time of the transaction, does not affect the reported or fiscal result. Deferred income tax is calculated using the tax rates (and laws) that have been decided or announced on the balance sheet date and that are expected to be in force when the deferred tax asset concerned is realised or the deferred tax liability is settled. Deferred tax assets are reported to the extent that it is probable that future fiscal surpluses will be available, against which the temporary differences can be utilised. Deferred tax assets and liabilities are offset when there is a legal set-off right for current tax assets and tax liabilities and when the deferred tax assets and liabilities relate to taxes charged by one and the same tax authority and refer to either the same taxpayer or different taxpayers, where there is an intention to settle the balances through net payments.
P1 P2 P3 P4 P5 P6 P7 P8 P9
See also Note G2, Important estimates and decisions for accounting purposes.
Financial statements
HEMNET GROUP | ANNUAL AND SUSTAINABILITY REPORT 2021· 47
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