When part of the consideration paid in a business combination is related to brands, these are recognized in a specific Intangible Assets account and measured at fair value at the acquisition date. Subsequently, the value of brands can be reduced in case of impairment losses. Internally generated expenditures for developing a brand are recognized as expenses.
Purchased software is measured at cost less accumulated amortization.
Amortization related to software is included in cost of sales, distribution and sales expenses, marketing expenses or administrative expenses based on the activity the software supports.
Other intangible assets, acquired by the Company, are stated at acquisition cost less accumulated amortization and impairment losses.
Other intangible assets also include multi-year sponsorship rights acquired by the Company. These are initially recognized at the present value of the future payments and subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets with definite useful lives are amortized based on the straight-line method over their estimated useful lives. Licenses, supply and distribution rights are amortized over the period in which the rights exist. Brands are considered to have an indefinite life and, therefore, are
not
amortized. Software and capitalized development cost related to technology are amortized over
3
to
5
years.
Items that are
not
amortized are tested for impairment on an annual basis.
