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CONSOLIDATED FINANCIAL STATEMENTS
2.6 INTANGIBLE ASSETS
a) Goodwill
Goodwill represents the acquisition cost exceeding the
fair value of the subsidiary’s/associated/jointly con-
trolled company’s assets and liabilities identifiable on
the acquisition date. Goodwill resulting from the acqui-
sition of subsidiaries is included in intangible assets.
Goodwill is subject to annual impairment tests and is
shown at cost, minus accumulated impairment losses.
Impairment losses are not reverted. Gains or losses
from the sale of an entity include the value of the good-
will in reference to the said entity.
Goodwill is allocated to the units that generate the cash
flows for performing impairment tests.
b) Research and development
Research expenses are recognised as costs when in-
curred. Costs incurred on development projects (for
designing and testing new products or for product
improvements) are recognised as intangible assets
when it is likely that the project will be successful, in
terms of its commercial and technological feasibility
and when the costs may be reliably measured. Other
development expenses are recognised as expenses
when incurred. Developments costs previously rec-
ognised as expenses are not recognised as an asset
in subsequent periods. Development costs with a fi-
nite lifetime that have been capitalised are amortised
from the time the product begins commercial produc-
tion according to the equal annual amounts method
during the period of its expected benefit, which can-
not exceed five years.
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 im-
pairment tests. Assets subject to amortisation are reval-
uated to determine any impairment whenever there are
events or alterations in the circumstances causing their
accounting value not to be recoverable. An impairment
