CONSOLIDATED FINANCIAL STATEMENTS >
EXPLANATORY NOTES
140
| 2013 ANNUAL REPORT | PRYSMIAN GROUP
(b) Patents, concessions, licences, trademarks and
similar rights
These assets are amortised on a straight-line basis over their
useful lives.
(c) Computer software
Software licence costs are capitalised on the basis of purchase
costs and costs to make the software ready for use. These
costs are amortised on a straight-line basis over the useful life
of the software. Costs relating to the development of software
programs are capitalised, in accordance with IAS 38, when it
is likely that the asset’s use will generate future economic
benefits and if the conditions described in paragraph (d)
Research and development costs are met.
(d) Research and development costs
Research and development costs are expensed to the income
statement when they are incurred, except for development
costs which are recorded as intangible assets when all the
following conditions are met:
• the project is clearly identified and the related costs can be
reliably identified and measured;
• the technical feasibility of the project can be
demonstrated;
• the intention to complete the project and to sell its output
can be demonstrated;
• there is a potential market for the output of the intangible
asset or, if the intangible asset is to be used internally, its
usefulness can be demonstrated;
• there are sufficient technical and financial resources to
complete the project.
Development costs capitalised as intangible assets start to
be amortised once the output of the project is marketable.
B.8
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT AND FINITE-LIFE
INTANGIBLE ASSETS
Property, plant and equipment and finite-life intangible
assets are analysed at each reporting date for any evidence
of impairment. If such evidence is identified, the recoverable
amount of these assets is estimated and any impairment loss
relative to carrying amount is recognised in profit or loss. The
recoverable amount is the higher of the fair value of an asset,
less costs to sell, and its value in use, where the latter is the
present value of the estimated future cash flows of the asset.
The recoverable amount of an asset which does not generate
largely independent cash flows is determined in relation
to the cash-generating unit to which the asset belongs.
In calculating an asset’s value in use, the expected future
cash flows are discounted using a discount rate reflecting
current market assessments of the time value of money, in
relation to the period of the investment and the specific risks
associated with the asset. An impairment loss is recognised
in the income statement when the asset’s carrying amount
exceeds its recoverable amount. If the reasons for impairment
cease to exist, the asset’s carrying amount is restored with the
resulting increase recognised through profit or loss; however,
the carrying amount may not exceed the net carrying amount
that this asset would have had if no impairment had been
recognised and the asset had been depreciated/amortised
instead.
In the case of the Prysmian Group, the smallest CGU of the
Energy operating segment can be identified on the basis of
location of the registered office of the operating companies
(country)
1
, whilst for the Telecom operating segment, the
smallest CGU is the operating segment itself.
(1) If the operating units of one country almost exclusively serve other countries, the smallest CGU is given by the group of these countries.
