New Wave Group AB Annual_report_2018_EN_HQ | Page 73

NWG // FINANCIAL INFORMATION //
THE GROUP
are expected to arise during the remaining useful
life of each asset. Expenditures related to internally
developed intangible assets, excluding goodwill,
which emerge during the development phase are
capitalized only when in management’s judgement
it is probable that they will result in future economic
benefits for the Group and the expenditures during
the development phase can be reliably measured.
The cost of an internally generated asset includes
direct manufacturing expenditures and a portion of
indirect expenses attributable to the actual asset.
Intangible assets are amortized on a straight-line
basis over their expected useful lives. Amortization
begins when the asset is available for use and is
reported on a straight-line basis.
Product development for the Group mainly
comprises design and development of new collec-
tions as well as development of new product variants
within the existing product range. Such development
generally does not meet the criteria for recognition in
the balance sheet. All other expenditures during the
research phase as well as development expenditures
not meeting the capitalization criteria are charged to
the income statement when incurred.
Intangible assets are recorded at cost and amor-
tised on a straight-line basis over their useful lives.
An intangible asset with an indefinite useful life is
not amortised but tested for impairment annually
or more frequently. New Wave Group recognises
goodwill and trademarks, which are both classified
as intangible assets with indefinite useful lives.
The following useful lives are applied in New Wave
Group:
Computer software
Other intangible fixed assets*
* Primarily consist of customer relations
Tangible fixed assets
Tangible fixed assets are valued at cost after adjusting
for depreciation and any impairment, and are depre-
ciated on a straight-line basis over their expected
useful lives. In determining the depreciable amount
for an individual asset account is taken of any residual
value of the asset. To the extent that an asset consists
of components which differ materially in respect of
their useful lives, these are depreciated separately
(component depreciation). The acquisition value of
a tangible fixed asset that has been manufactured
includes direct manufacturing expenses and shares
of attributable indirect expenses. Depreciation
begins when the asset becomes available for use.
Land is not depreciated.
Tangible fixed assets are removed from the
balance sheet upon sale or if the asset is not expected
to generate any future economic benefits neither
by being used nor being sold. Capital gains and
losses are calculated as the difference between the
consideration received and the asset’s carrying
amount. The capital gain or loss is recognised in the
income statement in the period in which the asset is
removed from the balance sheet. The assets’ residual
values, useful lives and methods of depreciation
are reviewed at the end of each financial year and
adjusted prospectively, if required.
Expenditures on maintenance and repairs are
expensed as incurred, but expenditures on signi-
ficant improvement works are added to the cost
and depreciated over the remaining useful life of
the underlying asset. The following useful lives are
applied in New Wave Group:
15-33 %
5-10 %
Buildings
Equipment, tools and installations
2-4 %
10-33 %
ANNUAL REPORT // 073