Annual Report 2012 - Swiss Life

128 Consolidated Financial Statements
For the purpose of impairment testing, goodwill is allocated to cash-generating units. Goodwill is
tested for impairment annually and whenever there is an indication that the unit may be impaired.
Goodwill is carried at cost less accumulated impairment losses. Impairment losses on goodwill are
not reversed in subsequent periods.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
Negative goodwill is immediately recognised in profit and loss.
Customer relationships
Customer relationships consist of established relationships with customers through contracts that
have been acquired in a business combination or non-contractual customer relationships that meet
the requirement for separate recognition. They have a definite useful life of generally 5 to 20 years.
Amortisation is calculated using the straight-line method over their useful lives.
Brands and Other
Other intangible assets consist of trademarks, computer software and other.
Brands and trademarks with a definite useful life of generally 5 to 20 years are amortised using the
straight-line method over their useful lives. Brands with an indefinite useful life are tested for impairment
on an annual basis as part of the cash-generating unit to which they belong. They are carried at
cost less accumulated impairment.
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and
bring to use the specific software. These costs are amortised on a straight-line basis for the expected
useful life up to three years. Costs associated with developing or maintaining computer software
programs are recognised as an expense as incurred. Development costs that are directly associated
with identifiable software products controlled by the Group and that will probably generate future
economic benefits are capitalised. Direct costs include the software development team’s employee
costs. Computer software development costs recognised as assets are amortised using the straightline
method over their useful lives, not exceeding a period of three years.
2.16 Impairment of non-financial assets
For non-financial assets the recoverable amount is mea sured as the higher of the fair value less costs
to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an
asset or cash-generating unit in an arm’s-length transaction between knowledgeable, willing parties,
less the costs of disposal. “Value in use” is the present value of the future cash flows expected to be
derived from an asset or cash-generating unit from its continuing use.
Impairment losses and reversals on other assets are recognised in operating expenses.
2.17 Income taxes
Current and deferred income taxes are recognised in income except when they relate to items recognised
directly in equity. Income taxes are calculated using the tax rates enacted or substantively enacted as
of the balance sheet date.
Swiss Life – Annual Report 2012