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Annual Report 2017/18

Note 4 - Important estimates and judgements for accounting purposes

Estimates and judgements are reviewed periodically and are based on historical experience and other factors, including expectations of future events considered reasonable under the prevailing circumstances.

4.1 Important estimates and judgements for accounting purposes

The Group makes estimates and assumptions about the future. The estimates for accounting purposes that result from these will, by definition, seldom correspond with the actual outcome. The estimates and assumptions that involve a noteworthy risk of significant adjustments to carrying values of assets and liabilities during the next financial year are set out in general terms below.

Impairment testing of goodwill

Every year the Group investigates whether there is an impairment requirement for goodwill, in accordance with the accounting policy described in Note 2.6. The recoverable values of cash-generating units have been defined by means of calculating the value in use. Certain estimates must be made for these calculations (Note 32).

The carrying amount of goodwill totals KSEK 77,415 as of August 31 2018 (7,976 KSEK 31 August 2017).

Valuation of tax loss carryforwards

Deferred tax assets are only recorded for tax loss carryforwards for which it is likely that they can be utilised against future taxable surpluses and against taxable temporary differences.

Every year the Group investigates whether it is appropriate to capitalise new deferred tax receivables in respect of the year’s or previous years’ tax loss carryforwards.

Retained expenses for development expenses

The Group has retained expenses for development expenses in respect of mobile games that are recorded as intangible assets. After the initial recording, the impairment requirement is tested as soon as there are indications that the asset has reduced in value. The Group performs estimates of the useful life in connection with the initial recording. The useful life is tested every year and adjusted as required. The Group’s retained expenses for development expenses are depreciated over three years.

As of August 31, 2018, retained expenses for development expenses totaled KSEK 28,092 (26,485, August 31, 2017).