Consolidated Financial Statements
b) Research and development
Research expenses are recognised as costs
when incurred. 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 com-
mercial and technological feasibility and when
the costs may be reliably measured. Other de-
velopment expenses are recognised as expenses
when incurred. Developments costs previously
recognised as expenses are not recognised as
an asset in subsequent periods. Development
costs with a finite lifetime that have been capi-
talised are amortised from the time the product
begins commercial production according to the
equal annual amounts method during the period
of its expected benefit, which cannot exceed five
years.
c) Software
The cost of acquiring software licences is capi-
talised and includes all costs incurred for ac-
quiring and installing the software available for
utilisation. These costs are amortised during the
estimated lifetime (not exceeding 5 years).
Software development or maintenance costs
are recognised as expenses when incurred.
Costs associated directly with creating identifia-
ble and unique software controlled by the Group
and that will probably generate future economic
benefits greater than the costs, for more than
one year, are recognised as intangible assets.
Direct costs include personnel costs for devel-
oping software and the share in relevant general
expenses.
Software development costs recognised as as-
sets are amortised during the software’s esti-
mated lifetime (not exceeding 5 years).
d) Concessions and territorial rights
Concessions and territorial rights are presented
at the historic cost. Concessions and territo-
rial rights have a finite lifetime associated to the
contractual periods and are presented at cost
minus accumulated amortisation.
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