The Benetton Group Annual Report 1996

COMMENTS ON THE PRINCIPAL ASSET CAPTIONS
(in millions of Lire)
FIXED ASSETS
6. Intangible fixed assets
This caption consists of the following:
12-31-1995 12-31-1996
Gross Net Gross Net
Start-up and expansion expenses 30,752 17,349 27,940 11,458
Research and development expenses 1,413 867 1,333 819
Industrial patents and intellectual
property rights
Licenses, trademarks and similar rights 22,149 11,289 22,486 10,417
Goodwill 1,016 622 2,435 1,875
Consolidation differences 20,274 17,542 24,505 19,641
Total goodwill and consolidation
differences
Assets in course of formation and
advance payments
Expenses related to bond issues
and loans
Costs for the purchase and
development of software
1,505
21,290
3,340
11,671
12,623
1,021
18,164
3,340
6,903
5,593
2,615
26,940
3,101
7,322
13,023
1,408
21,516
Other 23,926 10,130 29,058 22,020
Total other intangible fixed assets
48,220 22,626
3,101
2,751
7,018
49,403 31,789
Total 128,669 74,656 133,818 80,508
Start-up and expansion expenses relate to capital stock increase costs of approximately Lire 7,600
million (Lire 10,000 million as of December 31, 1995). The residual balance principally relates to
corporate reorganization costs, as well as expenses incurred in prior years to launch the "Fabrica"
project.
Research and development expenses reflect the capitalization of costs incurred for the development of
new products.
As indicated above, the parent company revalued the original cost of a trademark during 1983, as
allowed by Law 72 of March 19, 1983. The monetary revaluation, Lire 4,430 million, was allocated to the
Group's principal brandname.
Consolidation differences amounting to Lire 19,641 million reflect the residual goodwill arising on the
consolidation of the investments in Calzaturificio di Varese S.p.A.; Azimut S.p.A.; Filma S.p.A., owned by
Galli Filati S.p.A.; Spiller S.p.A., owned by Stefani S.p.A.; Benetton Group Japan K.K.; Benetton
Engineering Ltd.; Benetton Retail (1988) Ltd., and United Colors of Benetton do Brasil S.A.. Consolidation
differences are amortized over ten years, which is considered appropriate since this is consistent with
the accounting policies currently applied in the sector in which Group companies operate.
"Other" mainly comprises leasehold improvements.