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Vestas Wind Systems A/S
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== '''Other operating assets and liabilities''' == '''Development projects and other intangible assets''' Vestas continually invests in the development of new technologies and, for this reason, development projects constitute a significant part of the total intangible assets. The continuous investments include a wide portfolio of development projects. Vestas does not have one individually significant development assets. '''Impairment relating to offshore activity''' In 2022, Vestas recognised an impairment loss of EUR 177m relating to the V164/174 offshore activity, impacting the Power Solution segment by EUR 165m and the Service segment by 12m. Intangible assets, including technology, were written down by EUR 96m to EUR 439m and tangible assets were written down by EUR 81m to EUR 113m, reflecting the recoverable amount of the assets. '''The recoverable amount is based on the discounted value''' of future expected cash flows from the offshore activity. A discount rate before tax of 9.8% was used. The impairment was primarily due to revised assumptions on offshore order intake and project profitability. The test remains sensitive to changes in key assumptions, including order intake, project margins and service margins. A change in order intake will have a significant impact on the recoverable amount. A change of 1%-point in the assumed project margin will result in a EUR 15m change to the recoverable amount and a change of 1%-point in the service margin will result in a EUR 22m change to the recoverable amount. '''Intangible assets''' '''1. Estimates of Future Cash Flows for MVOW Assets:''' As part of the acquisition of MHI Vestas Offshore Wind (MVOW), Vestas tested the acquired intangible and tangible assets for impairment as of 31 December 2022. The impairment test compared the carrying amount of assets to the discounted value of expected future cash flows from the offshore activity (value-in-use), based on key assumptions subject to significant uncertainty. '''2. Goodwill:''' Goodwill, the difference between the fair value of net assets acquired and the consideration transferred, is initially recognized and subsequently measured at this value less accumulated impairment losses. It is allocated to Vestas' operating segments and tested at least annually for impairment. Impairment losses on goodwill are recognized in the income statement and not reversed. '''3. Development Projects:''' Projects for the development and testing of new wind turbines are recognised as intangible assets if they meet specific criteria, intending future commercial purposes. Development costs not qualifying for capitalisation are recognised in the income statement as research and development costs. Amortisation of development projects occurs on a straight-line basis over their estimated useful lives, tested for impairment at least annually. '''4. Patents and Licenses:''' Patents and licenses included in development projects are measured at cost less accumulated amortisation and impairment losses, amortised over their respective periods. '''5. Software:''' Acquired and internally developed software is measured at cost less accumulated amortisation and impairment losses, amortised on a straight-line basis over three to five years. '''6. Other Intangible Assets:''' Customer relationship, order backlog, and trademarks with finite useful lives acquired from third parties are capitalised at cost and amortised over their remaining useful lives. Other intangible assets not falling under these categories are measured at cost less amortisation and impairment losses.
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