Notes
for any leasing prepayments or directly related costs, including re-
moval and restoration costs. The leasing obligation is measured at
the present value of leasing payments in the leasing period, discount-
ed using the implicit interest rate in the leasing contract. In cases
where the implicit interest rate cannot be determined, the company’s
marginal lending rate is used.
Prepaid costs
Prepaid costs are measured at cost price.
Equity
Dividends
Dividends are recognised as a liability at the time the proposal for
dividends is adopted at the ordinary annual general meeting (the time
of declaration). Dividends that are expected to be paid for the year are
shown as a separate item under equity.
When there is an extension of the leasing period, options are only
recognised if it is reasonably certain that they will be exercised. The
majority of the extension and termination options in the contract can
only be exercised by the company and not the respective lessor.
Revaluation reserve
The revaluation reserve consists of a value adjustment in connection
with revaluing the price of buildings when transitioning to the Danish
Financial Statements Act of 2001.
For subsequent measurements, the right of use is used with deduc-
tion of accumulated depreciations and write-downs and adjusted for
any potential re-measurements of the leasing obligation. Deprecia-
tion is only made based on the linear method over the leasing period
of right of use period, whichever is shortest. The leasing obligation
is measured at amortised cost price when using the effective inter-
est rate method and adjusted for any potential re-measurements or
changes made to the contract. Any potential service elements that
can be separated from the lease contract are recognised separately
from the lease contract. For service elements that cannot be separat-
ed from the lease contract, the payments for these are recognised as
part of the leasing obligation.
Payable taxes and deferred taxes
Current tax liabilities and receivable current taxes are recognised
in the balance sheet as calculated tax on the year’s taxable income,
adjusted for tax on previous years’ taxable incomes and for paid on
account taxes.
Deferred taxes are measured based on the balance sheet oriented
debt method of all temporary differences between the book value and
the taxable value of assets and liabilities. However, deferred taxes
from temporary differences concerning taxable goodwill that cannot
be depreciated and other items are not included in the event that the
temporary differences, except for company handovers, have arisen at
the time of acquisition without having an impact on the result or the
taxable income. In cases where the calculation of the taxable value
can be made after different tax rules, deferred taxes are measured
on the basis of the management’s planned use of the asset or the
repayment of the liability.
The right of use for assets and leasing obligations are not recognised
if the leasing agreement concerns low-value assets or if the leasing
period is 12 months or below. These are recognised as a cost line-
arly over the leasing period. The company has chosen to make an
exception and not separate leasing contracts into leasing or service
elements. The company uses this approach for, among other things,
cars where the value of the service is not calculated.
Inventories
Deferred tax assets, including the taxable value of deficits that can be
carried forward, are recognised under other long-term assets at the
value of which they are expected to be used, either for the equalisa-
tion of tax or when offsetting deferred tax liabilities in the same legal
tax entity or jurisdiction.
Inventories are measured at cost price based on the FIFO method or
the net realisation value if this is lower.
The cost price for commercial goods includes the acquisition price
with the addition of any potential import taxes. The net realisation
value for inventories is calculated as the sales sum minus the com-
pletion costs and cost incurred to realise the sale and determined
while taking into account transferability, obsolescence and the devel-
opments in the expected sales price.
Deferred tax assets of tax liabilities are offset if the company has a le-
gal duty to offset current tax liabilities and tax assets or if it intends
to pay current tax liabilities and tax assets on a net basis or to realise
the assets and liabilities concurrently.
Receivables
Deferred taxes are measured on the basis of the tax rules and tax
rates in the respective countries which pursuant to the legislation on
the balance sheet day would apply when the deferred taxes are ex-
pected to become current taxes. Changes to deferred taxes resulting
from changes to tax rates are recognised in the year’s total income.
Receivables from sales are mainly product receivables. Receivables
are at the first recognition measured at fair value and subsequently
at amortised cost price. Receivables from sales are written down on
the basis of an individual assessment and the simplified approach
pursuant to IFRS 9, where provisions for losses are based on the ex-
pected credit loss for the duration.
Provisions
Provisions are recognised when the company, due to an event that
has occurred before or on the balance sheet date, has a legal or ac-
tual obligation and it is likely that financial benefits must be paid to
meet this obligation.
Receivables from sales and other receivables are recognised at am-
ortised cost price minus write-downs to address losses. There is
made write-downs to address the losses that are believed to possibly
materialise. If the customers’ financial conditions deteriorate further
and they are unable to make the payments, it may be necessary to
make additional write-downs in future financial years. A provision
for the expected credit loss in the duration is based on a customer
group’s credit risk and by how much the due date for payment has
been exceeded. In connection with assessing whether RIAS’ write-
downs to address losses are sufficient, the management analyses
receivables, including earlier losses on receivables from goods, the
customers’ creditworthiness, current financial conditions and chang-
es to the customers’ terms of payment.
Provisions are measured based on the management’s best estimates
of the amount at which the obligation can be paid.
Financial liabilities
Debt to credit institutions, etc. is recognised at the time the debt is
assumed at fair value after the deduction of incurred transaction
costs. In subsequent periods, the financial obligations are measured
at amortised cost price using the “effective interest rate method”, so
that the difference between the profits and the nominal value are
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RIAS Annual Report 2022/23
