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when incurred. Developments costs previously recog-
nised as expenses are not recognised as an asset in
subsequent periods. Development costs with a finite
lifetime that have been capitalised are amortised from
the time the product begins commercial production
according to the equal annual amounts method dur-
ing the period of its expected benefit, which cannot
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
recognised as expenses when incurred. Costs asso-
ciated directly with creating identifiable and unique
software controlled by the Group and that will prob-
ably generate future economic benefits greater than
the costs, for more than one year, are recognised
as intangible assets. Direct costs include personnel
costs for developing software and the share in rel-
evant 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 accumu-
lated amortisation.
2.7 IMPAIRMENT OF ASSETS
Intangible assets with a specific lifetime are not sub-
ject to amortisation and are, instead, subject to an-
nual impairment tests. Assets subject to amortisation
are revaluated to determine any impairment whenev-
er there are events or alterations in the circumstances
causing their accounting value not to be recoverable.
An impairment loss is recognised in the consolidated
statement of comprehensive income by the amount
by which the recoverable amount exceeds the ac-
counted amount. The recoverable amount is the high-
est 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
lowest level at which it may be able to separately iden-
tify 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 negative
Ebitda for at least 2 years are subject to impairment tests.
Consolidation differences are distributed among the
group’s cash-flow generating units (CGUs), identified
according to the country of operation and the busi-
ness segment.
The recoverable value of a CGU is determined based
on calculating the utilisation value. Those calculations
apply cash flow forecasts based on financial budgets
approved by the managers and cover a 5-year period.
