Catom Annual Report 2022 EN

The results of newly acquired group companies and the other legal entities and companies included in the consolidation are consolidated from the acquisition date. On that date – if there is an acquisition of an integrated set of activities, assets and/or liabilities capable of generating income – the acquired assets and liabilities are valued at fair values. If the acquisition price is higher than the fair values of the assets and liabilities acquired, goodwill is capitalised and amortised over the expected useful life. If the acquisition price is lower than the fair values of the assets and liabilities acquired, this is negative goodwill. To the extent that negative goodwill relates to expected future losses and expenses that have been taken into account in the acquisition plan and can be measured reliably, but do not yet represent an identifiable liability on the acquisition date, that portion of negative goodwill is recognized in profit or loss as incurred. Negative goodwill that does not relate to expected future losses and charges is credited to the profit and loss account as follows: • the portion of negative goodwill not exceeding the fair value of identifiable non monetary assets is systematically credited to the income statement in proportion to the weighted average remaining useful life of the amortizable assets acquired; and • the portion of negative goodwill in excess of the fair value of identified non-monetary assets is recognized immediately in profit or loss.

Negative goodwill is recognized as a separate accrued liability.

Since the company’s financial data are included in the consolidated financial statements, the company financial statements include only an abridged profit and loss account pursuant to Section 2:402 of the Dutch Civil Code.

57