NWG // FINANCIAL INFORMATION
Valuation of goodwill and trademarks
The reported value for intangible assets amounted to SEK 1,769 million per 31 of December 2022 according to the consolidated statement regarding financial position . That amount represents 16 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 5,298 million per 31 of December 2022 according to the consolidated statement regarding financial position . That amount represents 48 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 stock-in-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 2-62 and 135-139 . The Board of Directors and the Managing Director 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 and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts . In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated .
If we , based on the work performed concerning this information , conclude that there is a material misstatement of this other information , we are required to report that fact . We have nothing to report in this regard .
Responsibilities of the Board of Directors and the CEO
The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and , concerning the consolidated accounts , in accordance with IFRS as adopted by the EU . The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement , whether due to fraud or error .
ANNUAL REPORT // 131