Annual Report 2010 - CDON Group

58 CDON Group AB
Annual Årsredovisning report 2010 2010
2.11 Convertible bonds
Convertible bonds can be converted to shares if the counterpart exercises the option to convert the receivable into shares,
recognised as a compound financial instrument divided into a debt portion and an equity portion. The fair value of liabilities on the
date of issue is calculated on the basis of future cash flows, which are discounted using the current market rate for similar liabilities,
with no rights of conversion. The value of equity instruments is calculated as the difference between the issue proceeds when the
convertible promissory note was issued and the fair value of the financial liability on the date of issue. Any deferred tax liability on
the date of issue is deducted from the carrying value of the equity instrument. Transaction costs associated with the issue of a
compound financial instrument are distributed between the debt portion and the equity portion in proportion to the distribution of
the issue proceeds. Interest expense is recognized in profit/loss for the year and is calculated using the effective interest method.
2.12 Property, plant, and equipment
Property, plant, and equipment are recognised in the consolidated accounts at cost, less accumulated depreciation and any
impairment losses. Cost includes the purchase price and expenses directly attributable to ensuring the asset is in place and in the
right condition to be used as intended. Borrowing costs that are directly attributable to the purchase, construction, or production of
assets that require a substantial amount of time to ready for their intended use or sale are included in the cost.
The carrying amount of an item of property, plant, or equipment is derecognised from the statement of financial position upon
disposal or sale or when no future financial benefits are expected from the asset’s use, disposal, or sale. Gains or losses that arise
from an asset’s sale or disposal comprise the difference between the selling price and the carrying amount, less direct selling
expenses. Gain and loss are recognised as other operating income/expense.
2.12.1 Depreciation principles for property, plant, and equipment
Depreciation occurs on a straight-line basis over the estimated useful life of the asset. The impairment methods used, residual
values, and useful lives are reassessed at each year-end.
Estimated useful lives:
Equipment 3-10 years
2.13 Intangible assets
2.13.1 Intangible assets with indefinite useful lives
2.13.1.1 Goodwill
Goodwill is valued at cost, less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is tested at
least once a year for impairment (see accounting policy 2.15).
2.13.1.2 Trademarks
Trademarks are carried at cost, less any accumulated impairment losses. Trademarks are allocated to cash-generating units and are
tested at least once a year for impairment (see accounting policy 2.15).