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CONSOLIDATED FINANCIAL REPORT | EXPLANATORY NOTES
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B.7 INTANGIBLE ASSETS
Intangible assets are non-monetary assets which are separately identifiable, have no physical nature, are
under the company's control and are able to generate future economic benefits. Such assets are recognised
at acquisition cost and/or production cost, including all costs directly attributable to make the assets available
for use, net of accumulated amortisation and impairment, if any. Borrowing costs directly attributable to the
acquisition or development of qualifying assets are capitalised and amortised over the useful life of the asset
to which they refer. Amortisation commences when the asset is available for use and is calculated on a
straight-line basis over the asset's estimated useful life.
(a) Goodwill
Goodwill represents the difference between the cost incurred for acquiring a controlling interest (in a
business) and the fair value of the assets and liabilities identified at the acquisition date. Goodwill is not
amortised, but is tested for impairment at least annually to identify any impairment losses. This test is carried
out with reference to the cash-generating unit ("CGU") or group of CGUs to which goodwill is allocated and
at which level it is monitored. Reductions in the value of goodwill are recognised if the recoverable amount of
goodwill is less than its carrying amount. Recoverable amount is defined as the higher of the fair value of the
CGU or group of CGUs, less costs to sell, and the related value in use (see Section B.8 Impairment of
property, plant and equipment and finite-life intangible assets, for more details about how value in use is
calculated). An impairment loss recognised against goodwill cannot be reversed in a subsequent period.
If an impairment loss identified by the impairment test is higher than the value of goodwill allocated to that
CGU or group of CGUs, the residual difference is allocated to the assets included in the CGU or group of
CGUs in proportion to their carrying amount.
Such allocation shall not reduce the carrying amount of an asset below the highest of:
its fair value, less costs to sell;
its value in use, as defined above;
zero.
(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 when the conditions described below are met (see
paragraph (d) on Research and development costs).