NWG // FINANCIAL INFORMATION
for retailers , risks related to revenue reduction and the transfer of risk to the customer , which is why we have considered the revenue recognition as a key audit matter in our audit .
The audit procedures related to revenue recognition , among other things include walkthrough of processes and procedures related to revenue recognition , verification of compliance in regards to IFRS standards . Further , our audit includes detailed analysis of recorded revenue for different agreements based on historical results , budgets , and the follow ups were made to deviations from the expected outcome . We have performed random inspection of contracts and the transfer of risk associated to the period close in order to verify correct revenue accruals . Our audit has also included review of the supporting material that judgments , calculations and accruals related to estimates of discounts and bonuses are based on .
We have also reviewed the revenue disclosures .
Valuation of goodwill and trademarks
The reported value for intangible assets amounted to SEK 1,380.9 million per 31 of December 2020 according to the consolidated statement regarding financial position . That amount represents 19 percent of total assets . The Company performs checks of the reported value against the recoverable amount at an annual basis or at signs of impairment . The recoverable amount is determined for each cash generating unit by performing a present value calculation of future cash flows . The calculations are based on the decided business plan for the next five years and an estimate of cash flows at the end of the forecast period . The calculations are also based on a number of assumptions , such as growth , operating margin and discount rate .
Changes in assumptions have a material effect on the calculation of the recoverable amount . Due to this fact we have considered the valuation of goodwill and trademarks as a key audit matter in our audit . A description of the impairment loss test is presented in note 8 “ Intangible fixed assets ”.
As a part of our audit we have evaluated and tested the Company ’ s process for preparing impairment loss tests . The evaluation and testing has been based on a review of the accuracy of earlier forecasts and assumptions . We performed reasonability assessments of forecasted cash flows and growth assumptions by comparing them to other companies within the same industry . Furthermore we have tested the marketability of the Company ’ s assumptions regarding the discount rate and long term growth rate with support from our valuation experts . We have also reviewed the Company ’ s model and method for conducting impairment loss tests , this includes an evaluation of the Company ’ s sensitivity analysis . We have also reviewed the disclosures related to valuation of goodwill and trademarks in the annual report .
Valuation of inventory
The reported value of inventory amounted to SEK 2,883.0 million per 31 of December 2020 according to the consolidated statement regarding financial position . That amount represents 40 percent of total assets . The inventory is valued based on the first in-first out principle at the lowest cost and net realizable value at the balance sheet date . The calculation of the net realizable value is based on the Company ’ s assumptions regarding slow moving and obsolete goods . Due to this fact we have considered the valuation of inventory as a key audit matter in our audit .
The Company ’ s disclosures regarding stockin-trade is presented in note 15 in the annual report . We have reviewed the Company ’ s processes and procedures for assessing and following up on slow moving and obsolete goods . We have performed an analytical review based on historical comparisons and data analysis in order to identify slow moving and obsolete goods and assess the need to make provision . Furthermore we have also reviewed the disclosures related to valuation of inventory in the annual report .
Other information than the annual accounts and consolidated accounts
This document also contains other information than the annual accounts and consolidated accounts and is found on pages 2-56 and 131-135 . The renumeration report for 2020 is also other information . The Board of Directors and the CEO are responsible for this other information .
Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information .
In connection with our audit of the annual accounts and consolidated accounts , our responsibility is to read the information identified above
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