METSÄ BOARD Annual review 2023
4. Capital employed ■ 4.1 Intangible assets
Other intangible assets
Construction in progress
EUR million
Goodwill
Total
Acquisition cost, 1 Jan 2023
12.2
59.2
0.1
46.6
Translation differences
0.0 8.3
0.0
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Increases Decreases
8.1
16.4 -6.9
-6.9
Transfers between asset categories Acquisition cost, 31 Dec 2023
0.1
0.1
Accounting principles
Emission allowances The Group has received emission allowances in accordance with the European Union Emissions Trading System. Allowances are treated as intangible assets and are measured at acquisition cost. The acquisition cost of emission allowances received without con- sideration is zero. Emission allowances are used simultaneously with the carbon dioxide emissions generated during their validity period. Earnings from emission allowances sold are recognised in other operating income. If the emission allowances received without consideration are not sufficient to cover the amount of the actual emissions, the Group purchases additional allowances from the market. The allowances purchased are recognised in intangible rights at the fair value on the acquisition date. The provision to fulfil the obligation to return the emission allowances is recognised at fair value on the closing date of the reporting period if the emission allowances received without consideration and purchased are not sufficient to cover the amount of the actual emissions.
12.2
60.7
8.3
56.1
Goodwill Goodwill arising from the merging of business operations is recognised as the amount by which the sum of the consideration paid, the non-controlling interests’ share in the object of the acquisition and the previous holding exceed the fair value of the acquired net assets. Goodwill is not amortised. Instead, it is tested for impairment annually and always when there is an indication of a decrease in value. Goodwill is therefore allocated to cash-generating units for impairment testing. Goodwill is recognised at original acquisition cost less accumulated impairment losses. Other intangible assets Intangible assets are initially recognised at their original acqui- sition cost on the balance sheet if the acquisition cost can be determined reliably and it is probable that the expected financial benefit from the asset will be to the benefit of the Group. Intangible assets with limited useful lives are recognised as expenses over their known or estimated useful lives, using the straight-line depreciation method. The residual value of an asset, the useful life and depreciation method are reviewed at least annually, at the end of each financial period, and adjustments are made when necessary to reflect changes in the expected financial benefit of the asset. Research and development costs Research costs are recognised as expenses at the time they are incurred. Development costs are capitalised and amortised over their useful lives if the research project is likely to generate finan- cial benefits and the costs can be measured reliably. Metsä Board has not capitalised development costs. Computer software Costs arising from developing and building of significant new computer software are recognised as intangible assets on the balance sheet and depreciated on a straight-line basis over its estimated useful life, which is not to exceed seven years. Main- tenance and operating costs related to computer software are recorded as expenses in the reporting period during which they have been incurred. Configuration and customisation costs in the deployment of cloud services are recognised as expenses if they do not result in intangible assets. If the services received by the group are sep- arable, the costs are recognised as expenses when the supplier modifies the application. If the services received by the group are not separable, the costs are recognised as expenses when the supplier provides access to the application during the term of the agreement. Patents, licences and trademarks The cost of patents, licences and trademarks with finite useful lives are capitalised on the balance sheet under intangible assets and depreciated on a straight-line basis over their useful lives of 5–10 years.
Strategy and financial targets
Accumulated amortisation and impairment charges, 1 Jan 2023
-53.4
-28.5
8
Value creation
Translation differences
0.0 2.0 -1.4
0.0 2.0 -1.4
Accumulated amortisation on decreases and transfers
Amortisation for the period
Financial development 10 Key figures 12
Accumulated amortisation and impairment charges, 31 Dec 2023
-52.8
-27.9
Book value, 1 Jan 2023 Book value, 31 Dec 2023
12.2 12.2
5.8 7.8
0.1 8.3
18.1 28.3
Report of the Board of Directors
20 72
• Sustainability statement • Sustainability statement assurance report
Other intangible assets
Construction in progress
EUR million
Goodwill
Total
Acquisition cost, 1 Jan 2022
12.4
124.2
1.0
137.6
74
Consolidated financial statements
Translation differences
-0.5
-0.5
Increases
0.9 1.3
0.1
1.1 1.3
78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board
Acquired business
Decreases
-0.1
-67.8
-92.9
Transfers between asset categories Acquisition cost, 31 Dec 2022
1.0
-1.0
-12.2
59.2
0.1
46.6
Accumulated amortisation and impairment charges, 1 Jan 2022
-119.1
-119.1
Translation differences
0.4
0.4
Accumulated amortisation on decreases and transfers
66.4
91.4 -1.2
Amortisation for the period
-1.2
Accumulated amortisation and impairment charges, 31 Dec 2022
-53.4
-28.5
Book value, 1 Jan 2022 Book value, 31 Dec 2022
12.4 12.2
5.1 5.8
1.0 0.1
18.5 18.1
Other intangible assets include among other things computer software, patents and licenses. Acquired businesses in 2022 include the intangible assets of Hämeenkyrön Voima Oy. Further information is available in Note 7.2.
The Group received 582 thousand tonnes of emission allowances free of charge (597). In addition the Group has sold 655 thousand tonnes to the market (350). At balance closing date the group had emission allowances of 685 thousand tonnes (1,000). Emissions during the reporting period fell below the amount of emission allowances received free of charge and consequently emissions during the year did not have an impact on income statement or balance sheet.
Capital gains from the sale of emission allowances recognised in other operating income totalled EUR 55.0 million (29.0). On the balance sheet date, the fair market value of an emission right was EUR 77.25 per tonne (80.76) and total value of owned rights EUR 52.9 million (80.8).
170 Remuneration report 174 Investor relations and investor information
92
93
Consolidated financial statements | METSÄ BOARD ANNUAL REVIEW 2023
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