Note 8 - Intangible assets
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Trademarks, |
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patents |
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and other |
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intellectual |
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(in thousands) |
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property(1) |
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Software |
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Total |
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Cost |
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Balance as of January 1, 2016 |
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50,452 |
|
23,101 |
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73,553 |
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Additions |
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50 |
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1,932 |
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1,982 |
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Disposals |
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— |
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(2,133) |
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(2,133) |
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Impairment of other intangible assets |
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(3,478) |
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(50) |
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(3,528) |
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Effect of changes in exchange rates |
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(809) |
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(101) |
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(910) |
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Balance as of December 31, 2016 |
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46,215 |
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22,749 |
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68,964 |
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Additions |
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72 |
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2,221 |
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2,293 |
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Disposals |
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— |
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(1,496) |
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(1,496) |
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Effect of changes in exchange rates |
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1,472 |
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585 |
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2,057 |
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Balance as of December 31, 2017 |
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47,759 |
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24,059 |
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71,818 |
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Accumulated amortization |
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Balance as of January 1, 2016 |
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19,456 |
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12,002 |
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31,458 |
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Amortization for the year |
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527 |
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2,912 |
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3,439 |
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Disposals |
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— |
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(1,740) |
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(1,740) |
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Impairment of other intangible assets |
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(1,659) |
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(39) |
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(1,698) |
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Effect of changes in exchange rates |
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29 |
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(106) |
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(77) |
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Balance as of December 31, 2016 |
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18,353 |
|
13,029 |
|
31,382 |
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Amortization for the year |
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295 |
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2,657 |
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2,952 |
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Disposals |
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— |
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(1,478) |
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(1,478) |
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Effect of changes in exchange rates |
|
76 |
|
521 |
|
597 |
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Balance as of December 31, 2017 |
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18,724 |
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14,729 |
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33,453 |
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Carrying amounts |
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As of January 1, 2016 |
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30,996 |
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11,099 |
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42,095 |
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As of December 31, 2016 |
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27,862 |
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9,720 |
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37,582 |
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As of December 31, 2017 |
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29,035 |
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9,330 |
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38,365 |
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(1) |
Other intellectual property includes mainly goodwill, customer relations and technology. |
Amortization of intangible assets is charged to the departments which utilize the relevant assets (i.e., cost of revenues, sales and marketing expenses or general and administrative expenses).
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A. |
Intangible assets with indefinite useful life |
Other than goodwill, the Group has intangible assets with indefinite useful life. Indefinite-lived intangible assets are comprised of trademarks in the amount of $15 million (2016: $15 million) for which there is no foreseeable limit to the period over which they are expected to generate net cash inflows. These are considered to have an indefinite life given the strength and durability of the Group’s brands and the level of marketing support.
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B. |
Impairment of Goodwill |
For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the lowest level within the Group at which goodwill is monitored for internal management purposes, which is not higher than the operating segments, before the aggregation of segments, reported in Note 6 regarding operating segments.
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C. |
Impairment of other intangible assets |
During 2016, the Company recorded an impairment of $1.8 million in regard to other intellectual property originated from an acquisition of a subsidiary.