Annual Report 2010 - CDON Group

CDON Group AB
Annual Årsredovisning report 2010 2010
2.13.2 Intangible assets with defined useful lives
2.13.2.1 Development expenses
Development expenditures for creating new or improved products or processes are recognised as assets in the statement of
financial position if the product or process is technically and commercially viable and the Group has sufficient resources to complete
the development. The carrying amount includes direct costs and, where applicable, expenditure for salaries and share of indirect
expenses. Other expenses are recognised in the income statement as expenses when they arise. In the statement of financial
position, recognised expenses are carried at cost, less accumulated amortisation and any impairment losses. Capitalised
expenditures refer mainly to software and software platforms.
2.13.2.2 Domains
Domains are recognised at cost less accumulated amortisation (see below) and any impairment loss (see accounting policy 2.15).
2.13.2.3 Customer relationships
Customer relationships are carried at cost less accumulated amortisation (see below) and any impairment loss (see accounting
policy 2.15).
2.13.3 Amortisation method for intangible assets
Amortisations are recognised in profit/loss for the year on a straight-line basis over the estimated useful life of the intangible asset,
provided such useful life is indefinite. Useful lives are reassessed at least once a year. Goodwill and trademarks with indefinite
useful lives are tested for impairment annually and when there are indications that the asset has lost value. Intangible assets with
determinable useful lives are amortised from the date on which they become available for use. Estimated useful lives:
Development expenses 5 years
Domains 5 years
Customer relationships 4-5 years
2.14 Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and sale. The cost of inventory is based on weighted averages and
includes expenditures incurred in the acquisition of goods and bringing the goods to their form and location. Provisions for
obsolescence are included in cost of goods sold.
2.15 Impairment losses
The Group’s recognised assets are assessed on every reporting date to determine whether indications of impairment exist. IAS 36 is
applied to impairment of assets other than financial assets, which are recognised as per IAS 39.
2.15.1 Impairment of tangible and intangible assets
The recoverable amount of the asset is calculated if there is indication of impairment (see below). The recoverable amount is also
calculated annually for goodwill, trademarks, and intangible assets that are not yet ready for use. If substantially independent cash
flows to an individual asset cannot be established, and if the asset’s fair value less selling expenses cannot be used, then assets are
grouped in impairment testing at the lowest level at which substantially independent cash flows can be identified – this grouping is
called a cash-generating unit (CGU).
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