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Consolidated financial statements as at December 31, 2010
Goodwill
Goodwill is an intangible asset with an indefinite life, deriving from business combinations recognized using the purchase
method, and is recorded to reflect the positive difference between purchase cost and the Group’s interest at the
time of acquisition, after having recognized all assets, liabilities and identifiable contingent liabilities attributable to
both the Group and third parties at their fair value.
Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances
indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
Impairment losses are recognized immediately as expenses that cannot be recovered in the future
On disposal of a subsidiary or associate, the attributable amount of unamortized goodwill is included in the determination
of the profit or loss on disposal.
Other intangible assets
Intangible fixed assets are those lacking an identifiable physical aspect, are controlled by the company and are capable
of generating future economic benefits.
Other purchased and internally-generated intangible assets are recognized as assets in accordance with IAS 38 –
Intangible Assets, where it is probable that the use of the asset will generate future economic benefits and where the
costs of the asset can be determined reliably. straight-line basis over the lease terms.
Such assets are measured at purchase or manufacturing cost and amortized on a straight-line basis over their estimated
useful lives, if these assets have finite useful lives.
Other intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill if
their fair value can be measured reliably.
In case of intangible fixed assets purchased for which availability for use and relevant payments are deferred beyond
normal terms, the purchase value and the relevant liabilities are discounted by recording the implicit financial
charges in their original price.
Expenditure on research activities is recognized as an expense in the period in which it is incurred.
Development costs can be capitalized on condition that they can be measured reliably and that evidence is provided
that the asset will generate future economic benefits.
An internally-generated intangible asset arising from the Group’s e-business development (such as informatics solutions)
is recognized only if all of the following conditions are met:
an asset is created that can be identified (such as software and new processes);
it is probable that the asset created will generate future economic benefits; and
the development cost of the asset can be measured reliably.
These assets are amortized when launched or when available for use. Until then, and on condition that the above
terms are respected, such assets are recognized as construction in progress. Amortization is determined on a straight
line basis over the relevant useful lives.
When an internally-generated intangible asset cannot be recorded at balance sheet, development costs are recognized
to the statement of income in the period in which they are incurred.
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