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Consolidated Financial Statements
c) Software
The cost of acquiring software licences is capitalised
and includes all costs incurred for acquiring and install-
ing the software available for utilisation. These costs are
amortised during the estimated lifetime (5 years).
Software development or maintenance costs are rec-
ognised as expenses when incurred. Costs associated
directly with creating identifiable and unique software
controlled by the Group and that will probably gener-
ate future economic benefits greater than the costs, for
more than one year, are recognised as intangible as-
sets. Direct costs include personnel costs for developing
software and the share in relevant general expenses.
Software development costs recognised as assets are
amortised during the software’s estimated lifetime (not
exceeding 5 years).
d) Concessions and territorial rights
Concessions and territorial rights are presented at the
historic cost. Concessions and territorial rights have a
finite lifetime associated to the contractual periods and
are presented at cost minus accumulated amortisation.
2.7 Impairment of assets
Intangible assets with a specific lifetime are not subject to
amortisation and are, instead, subject to annual impair-
ment tests. Assets subject to amortisation are revaluated
to determine any impairment whenever there are events
or alterations in the circumstances causing their account-
ing value not to be recoverable. An impairment loss is rec-
ognised in the consolidated statement of comprehensive
income by the amount by which the recoverable amount
exceeds the accounted amount. The recoverable amount
is the highest amount between an asset’s fair value minus
the costs necessary for its sale and its utilisation value. To
perform impairment tests, assets are grouped at the low-
est level at which it may be able to separately identify cash
flows (units generating cash flows).
A cash-generating unit (CGU) is the smallest group of as-
sets which includes the asset and that generates cash
flows from continued use and which is generally inde-
pendent from the cash input from other assets or asset
groups. In the case of tangible assets, each shop was
identified as a cash-generating unit. Shops with nega-
tive operating income for at least 2 years are considered
with impairment.
Consolidation differences are distributed among the
group’s cash-flow generating units (CGUs), identified ac-
cording to the country of operation and the business
segment.
The recoverable value of a CGU is determined based on
calculating the utilisation value. Those calculations ap-
ply cash flow forecasts based on financial budgets ap-
proved by the managers and cover a 5-year period.
The Board of Directors determines the budgeted gross
margin based on past performance and on its market
growth expectations. The average weighted growth rate
used is consistent with provisions included in the sec-
tor’s reports. The discount rates used are prior to taxes
and reflect specific risks related with the assets from a
CGU.
2.8 Financial assets
2.8.1 Classification
The group classifies its financial assets under the follow-
ing categories: financial assets at the fair value through
results, loans granted and accounts receivable, invest-
ments held until maturity and financial assets available
for sale. The investment is classified according to its
