Consolidated Financial Statements
b) Industrial property
b.1) 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.
b.2) Software
The cost of acquiring software licences is capitalised 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 identifiable 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 developing
software and the share in relevant general expenses.
Software development costs recognised as assets are amortised during the software’s estima-
ted lifetime (not exceeding 5 years).
b.3) Brands
Brands acquired in business combinations are reflected at fair value.
c) Other intangible Assets
Research and development
Research expenses are recognised as costs when incurred. Costs incurred on development pro-
jects (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 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 be-
gins commercial production according to the equal annual amounts method during the period
of its expected benefit, which cannot exceed five years.
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