IBERSOL Annual Report 2018

ANNUAL REPORT 2018 b.2) Software The cost of acquiring software licences is capitalised and includes all costs incurred for acquiring and installing the software available for utilisation. These costs are am- ortised 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 rel- evant general expenses. Software development costs recognised as assets are amortised during the soft- ware’s estimated lifetime (not exceeding 5 years). b.3) Brands The brands acquired in business combinations are reflected at fair value at the date of the concentration (Eat Out group). Brands life cycle was determined considering the benchmark of the sector for brands of this dimension, which in general point to a life cycle of 20 years. c) Other intangible Assets Research and development Research expenses are recognised as costs when incurred. Costs incurred on devel- opment projects (for designing and testing new products or for product improve- ments) 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 recognised 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 during the period of its expected benefit, which cannot exceed five years. 2.8 IMPAIRMENT TANGIBLE FIXED ASSETS AND INTANGIBLE ASSETS Intangible assets with a specific lifetime are not subject to amortisation and are, instead, subject to annual impairment tests. Assets subject to amortisation are re- valuated to determine any impairment whenever there are events or alterations in the circumstances causing their accounting value not to be recoverable. An impair- ment loss is recognised in the consolidated statement of comprehensive income by the amount by which the recoverable amount exceeds the accounted amount. The 221