The Norwegian Financial Supervisory Authority has reviewed aspects of Borregaard ASA’s financial reporting, focusing on the impairment test of its investment in the associate Alginor ASA in the 2024 annual report. It found Borregaard’s calculation of value in use at 31 December 2024 was not in line with IAS 28 and IAS 36 because it included cash flows from project phases that were neither formally decided nor initiated, and issued a notice that it would require a new measurement of the recoverable amount as at 31 December 2024. Borregaard’s updated calculation, which also included determining fair value, indicated the recoverable amount exceeded the carrying amount, and the authority has taken note and closed the part of its review relating to the 2024 annual report. At 31 December 2024 the investment had a carrying amount of NOK 387 million (35% ownership). The review was triggered by a March 2025 directed share issue in Alginor at NOK 10 per share, a 72% reduction from the 2024 issue price (NOK 36), which was treated as an impairment indicator. Borregaard initially tested impairment using the IAS 28.42(a) approach and calculated value in use including cash flows from phases across the planned value chain, without estimating fair value less costs to sell; Finanstilsynet’s assessment was that IAS 36.44 precludes including cash flows from phases that are not decided, not started and not financed. In the remeasurement, Borregaard excluded cash flows relating to the later phases (F5 and F4), which produced a value in use below carrying value, and therefore also estimated fair value in accordance with IFRS 13; the fair value estimate supported no impairment at 31 December 2024. The letter also notes that Borregaard recognised an impairment loss of NOK 225 million on the investment in its fourth quarter 2025 interim report, reducing the carrying amount to NOK 196 million at 31 December 2025, and that Finanstilsynet has not obtained or verified the company’s calculations for either 31 December 2024 or 31 December 2025. The authority will conclude remaining matters relating to the fourth quarter 2025 interim report at a later stage. It also highlights the issuer’s obligations under the Market Abuse Regulation on the disclosure of inside information.
Norwegian Finanstilsynet 2026-03-16
Norwegian Financial Supervisory Authority closes Borregaard financial reporting review after challenging 2024 Alginor impairment test under IAS 28 and IAS 36
The Norwegian Financial Supervisory Authority reviewed Borregaard ASA's financial reporting, focusing on the impairment test of its investment in Alginor ASA in the 2024 annual report. It found non-compliance with IAS 28 and IAS 36 due to the inclusion of cash flows from undecided project phases, prompting a remeasurement showing the recoverable amount exceeded the carrying amount. The authority noted Borregaard's subsequent impairment loss of NOK 225 million in its fourth quarter 2025 interim report and will address remaining issues later.