Change in accounting practice for development costs related to Nordea’s digital services
Nordea has decided to change its accounting practice for development costs related to its digital services, following a review during the fourth quarter. Nordea’s current practice is to capitalise development costs and amortise them over their useful economic lives. Going forward, Nordea intends to expense such development costs as incurred. As a result of this change of accounting practice, in its fourth quarter results Nordea will record a EUR 130m write-off related to earlier capitalised development.
Nordea is in a very strong position in digital development. Nordea’s digital customer experience has been ranked highest among peers – and will improve even further. As the pace of digital development and innovation accelerates, Nordea continues to invest in its digital capabilities as a core enabler of its strategy. Nordea is a digital leader in the banking industry and strives to offer its customers all relevant digital products and services and maintain the number one position for mobile banking in the Nordics.
Nordea’s accounting policies, based on the IFRS, require IT development costs to be capitalised when development initiatives are expected to provide benefits over a longer period of time. During the fourth quarter, Nordea has reviewed its current development initiatives related to its digital services. The assessment concluded that the rapid pace of digital development, including the continuous and agile introduction of new features and implementation of new cloud-based solutions, makes it more difficult to evidence such benefits for accounting purposes. Accordingly, although Nordea’s digital services are highly rated by customers, Nordea has decided that it is preferable to expense such development costs as incurred.
In addition, in its fourth quarter results Nordea has decided to apply a more conservative accounting practice and discontinue capitalisation of such development costs, and to write off in full the current carrying amount of development costs of approximately EUR 130m related to its digital services. The impact of the change in accounting practice on Nordea’s earnings per share from 1 January 2024 is not significant.
For further information:
Ilkka Ottoila, Acting Head of Investor Relations, +358 953007058
Media inquiries, +358 10 416 8023 or press@nordea.com
We are a universal bank with a 200-year history of supporting and growing the Nordic economies – enabling dreams and aspirations for a greater good. Every day, we work to support our customers’ financial development, delivering best-in-class omnichannel customer experiences and driving sustainable change. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at nordea.com.
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