Torp Computing Group ASA

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INFORMATION MEMORANDUM
Merger of Komplett ASA and Torp Computing Group ASA
Classification of balance sheet items
Current assets and current liabilities comprise items due for payment within one year of the date of
balance sheet recognition, as well as items related to commodity flows. Other items are classified
as fixed assets/long-term liabilities. The consumer financing portfolio is considered to be linked to
commodity flows, which is why it is classified under current assets.
Loans and receivables
According to IAS 39 ‘Financial instruments’: Recognition and Measurement, financial instruments
are classified under the scope of IAS 39 in the categories loans and receivables and other financial
liabilities. Financial assets with regular or determinable cash flows that are not quoted in an active
market are classified as loans and receivables. Accounts receivable and other receivables are
measured at their amortized cost. Provisions for losses are booked when there are
objective indications that the Group will not be paid as originally agreed. Significant financial
problems for the debtor, the probability that the debtor will go bankrupt and defaulted payments
are considered indications that receivables must be written down. The provision constitutes the
difference between the nominal and recoverable amounts. Recoverable amounts are estimated
based on a specific review of each individual item, combined with historical experience. The
consolidated portfolio of loans for consumer financing is valued at amortized cost. Provisions for
estimated losses on loans in conjunction with consumer financing are estimated on the basis of
credit rating and the experience gained by the industry. The provision is made for the consumer
loan portfolio as a whole.
Inventories
Stock-in-trade is valued at average cost or net realisable value, whichever is lower. Write-downs
are taken on anticipated obsolescence. The provision for obsolescence is based on the rate of
turnover, and the proportion of price protection and/or stock rotation from suppliers, among other
things. Specific assessments are undertaken for the oldest items. Further, a provision for
obsolescence for the rest of the stock is based on historical experience and on a best estimate.
Tangible fixed assets
Production equipment is capitalised at cost price on the date of acquisition. Depreciation takes into
account any residual value and is calculated on a straight-line basis over its useful life. Writedowns
are posted when the amount recognised on the balance sheet exceeds the recoverable amount.
The term of depreciation and the need for write-downs are considered annually. Improvements
in/the decoration of rented premises are expensed over the remaining lease period and/or the
expected useful life.
Intangible assets
Computer software purchases are capitalised at acquisition cost (including the cost of making the
programmes operative) and depreciated over the expected useful economic life (3 to 5 years).
Other intangible assets are related to the purchase of supplier contracts. These are valued at
acquisition cost and depreciated on the basis of the expected useful economic life of the asset
based on additional future revenue. The cost of maintaining intangible assets is expensed, while
additions, improvements and major upgrades are capitalised. Impair ment tests are applied to
intangible assets when there is evidence of a decrease in value.
Provision for service and warranty liabilities
Provision for service and warranty liabilities covers future warranty commitments and other
mandatory liabilities in conjunction with the products sold. The provision represents a best
estimate based on historical data and future expectations.