Notes to the Financial Statements Note 2: Business Combinations continued Key Judgements and Estimates As part of the CSL Vifor acquisition in the year ended 30 June 2023, the Group identified the assets (comprising principally launched products and post pre-clinical stage) and liabilities acquired. Attributing fair values to assets acquired and liabilities assumed as part of business combinations is considered to be a key judgement. The purchase price allocation was performed with assistance from an independent valuer to advise on the valuation techniques and key assumptions in the valuation, in particular in respect of the valuation of the intangible assets and inventory. (a) Acquired trade receivables The fair value of acquired trade receivables is $422m, which approximates the gross contractual amount for trade receivables due. (b) Inventories The fair value of inventories, which includes rawmaterials, work in progress and finished goods related to the launched products was estimated at $459m. Acquired inventories includes a fair value adjustment related to work in progress and finished goods and was calculated as the estimated selling price less costs to complete and sell the inventory, associated margins on these activities and holding costs. (c) Property, plant and equipment Property, plant and equipment principally comprises manufacturing facilities and office space. Property, plant and equipment was fair valued using a market approach. (d) Other financial assets Other financial assets principally comprises investments in publicly traded securities (carried at fair value through OCI ‘FVTOCI’) and venture funds (carried at fair value through the profit or loss ‘FVTPL’). Valuation methods and assumptions used have been disclosed in Note 11(e). (e) Intangible assets (excluding goodwill) The fair value and useful lives of intangible assets at the date of acquisition were as follows: Fair value as at the date of acquisition US$m Useful lives (years) Commercialised products 6,494 19 – 30 Products in development 115 Not amortised Other intangible assets (software, brand name and customer assets) 97 5 – 20 Total intangible assets (excluding goodwill) 6,706 Product related intangible assets are fair valued using the multi-period excess earnings method, which uses a number of estimates regarding the amount and timing of future cash flows. The key assumptions in the cash flows are sales forecast, peak year sales, revenue erosion curves and probability of success. Future milestones have been included in the valuation of product related intangibles (as a deduction of cash flows). (f) Provisions (including recognised contingent liabilities) Provisions assumed include provisions for employee benefits, asset retirement obligations and onerous contracts. Provisions also include the estimated fair value of potential contingent liabilities assumed on acquisition date relating to various claims and disputes with third parties in each case where there is a possible, but not probable, future financial exposure, and involve an assessment of the likelihood of several scenarios in relation to those matters. CSL Limited Annual Report 2022/23 122
RkJQdWJsaXNoZXIy MjE2NDg3