DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. AND ...

Doosan Heavy Industries & Construction Co., Ltd. and SubsidiariesNotes to the Consolidated Financial StatementsFor the years ended December 31, 2012 and 201114. Intangible Assets(1) Changes in intangible assets for the year ended December 31, 2012 were as follows:IndustrialpropertyrightsDevelopmentcosts Others Total(In millions of won)GoodwillNet balance atbeginning of year₩ 750,640 288 277,436 129,513 1,157,877Acquisitions - 82 140,625 8,994 149,701Reclassification (29,038) 10,727 (11,642) 10,042 (19,911)Disposals - - - (998) (998)Amortization - (2,050) (25,142) (19,886) (47,078)Impairment losses - - - (3,065) (3,065)Changes inexchange rateNet balance atend of year(20,740) (479) (3,480) (991) (25,690)₩ 700,862 8,568 377,797 123,609 1,210,836(2) Changes in intangible assets for the year ended December 31, 2011 were as follows:IndustrialpropertyrightsDevelopmentcosts Others Total(In millions of won)Goodwill(*1)Net balance atbeginning of year₩ 720,558 390 229,755 119,649 1,070,352Acquisitions - 81 71,074 11,771 82,926Reclassification (758) - (4,568) 45,169 39,843Disposals - - - (2,226) (2,226)Amortization - (48) (18,448) (18,096) (36,592)Impairment loss (1,752) - (1,666) - (3,418)Changes inexchange rateChanges in scope ofconsolidationNet balance atend of year(24,450) - 1,289 (91) (23,252)57,042 (135) - (26,663) 30,244₩ 750,640 288 277,436 129,513 1,157,877(*1) For the purpose of impairment test, the carrying amount of goodwill was allocated to cash-generatingunits. The Group recognized the impairment loss amounting to ₩ 1,752 million for the year endedDecember 31, 2011.(3) Research and development costs expensed as incurred for the years ended December 31, 2012 and 2011were ₩ 36,647 million and ₩ 73,107 million, respectively.(4) Capitalization of borrowing cost for the years ended December 31, 2012 and 2011 are as follows:(In millions of won, except percentage) 2012 2011Capitalization of borrowing cost ₩ 1,859 94Interest rate of borrowing cost (%) 4.76 5.3255