IBERSOL | Integrated Management Report 2022

Consolidated Financial Statements Depreciation for the year of intangible assets is recorded in the income statement under the caption “Depreciation, amortization and impairment losses on non-finan- cial assets”. Impairment Assets subject to amortization are reassessed to determine any impairment, to be constituted or reverted, whenever events or changes in circumstances occur that cause the amount at which they are recorded to be recoverable or not. An impair- ment loss is recognized in the consolidated statement of income and other compre- hensive income for the excess amount of the asset’s carrying amount over its recov- erable amount. The recoverable amount is the higher of an asset’s fair value minus expenses incurred in selling it and its value in use. In order to carry out impairment tests, assets are grouped at the lowest level at which cash flows can be identified separately (cash generating units). The assessment of the existence of signs of impairment of the CGU and the carrying out of the respective tests, if necessary, occurs on an annual basis. Each restaurant is considered a cash generating unit (CGU), and in the case of airports each airport is a CGU. Each CGU comprises all the assets and liabilities attributable to each restaurant, namely: tangible fixed assets, intangible assets, rights of use and respective leasing liabilities. Trademark recoverability In the case of brands, valuations were carried out based on the use value calculated based on the Discounted Cash Flow (DCF) method and in accordance with the Royalty Relief methodology, that depending on the type of asset, support the recoverability of its values. The assessments carried out are supported by historical performance, market development expectations and the strategic development plans of each business. The Group’s main operating rights refer to the franchise rights paid to international brands when opening restaurants operating under the brand: 10 years in the case of Pizza Hut, Taco Bell and KFC, these renewable for another 10 years at the option of the franchised. 422