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Group 20: Intangible assets

|TEUR#158,620
in TEUR20112010
Development costs 11.768 12.096
Industrial property rights 14.712 15.373
Trademark 61.964 61.964
Goodwill 68.653 69.358
Intangible assets under construction 1.523 1.370
Total 158.620 160.161

Intangible assets include mainly trademarks (Atag, Etna and Pelgrim), deferred development costs, and software.

Goodwill in the amount of TEUR 62,130 and fair value of trademarks Atag, Etna and Pelgrim in the amount of TEUR 61,964 were established in 2008 at the acquisition of the company ATAG Europe BV. In addition, goodwill was established in 2008 in the amount of TEUR 1,617 at the acquisition of the majority interest in PUBLICUS, d.o.o. Goodwill in the amount of TEUR 2,030 was established in 2007 at the acquisition of the majority interest in Gorenje Surovina, d.d.. Goodwill in the amount of TEUR 2,875 was established in 2005 at the acquisition of Mora Moravia, s r. o. in the Czech Republic and Gorenje Studio, d.o.o. in Serbia.

Impairment testing of goodwill and trademarks


Impairment testing of goodwill and trademarks Atag, Etna and Pelgrim arising from the acquisition of ATAG Europe BV was carried out. The calculations are based on cash flow projections for ATAG, which have been prepared on the basis of the adopted business plan for 2012 and strategic business plan for the period from 2013 to 2015. The main underlying assumptions used to calculate the value in use are: the revenue growth rate of 3.0% (2010: 3.0%) and the discount rate of 13.31% (2010: 12.31%).
The recoverable value of the cash-generating unit exceeds its carrying amount, including that of goodwill and trademarks Atag, Etna and Pelgrim. Therefore there was no need for impairment.

Impairment testing of goodwill arising from the acquisition of Publicus, d.o.o. was carried out. The calculations are based on cash flow projections for Publicus, d.o.o., which have been prepared on the basis of the adopted business plan for 2012 and strategic business plan for the period from 2013 to 2015. The main underlying assumptions used to calculate the value in use are: the revenue growth rate of 3.5% (2010: 3.0%)  and the discount rate of 10.5% (2010: 9.5%).
The recoverable value of the cash-generating unit was determined to be not significantly lower from its carrying amount, including that of goodwill. Therefore there was no need for impairment of goodwill.

Impairment testing of goodwill arising from the acquisition of Mora Moravia, s r.o. was carried out. The calculations are based on cash flow projections for Mora Moravia, s r.o., which have been prepared on the basis of the adopted business plan for 2012 and strategic business plan for the period from 2013 to 2015. The main underlying assumptions used to calculate the value in use are: the revenue growth rate of 4.5% (2010: 2.0%) and the discount rate of 10.5% (2010: 9.5%).
The recoverable value of the cash-generating unit exceeds its carrying amount, including that of goodwill. Therefore there was no need for impairment of goodwill.

Impairment testing of goodwill arising from the acquisition of Gorenje Studio, d.o.o. was carried out. The calculations are based on cash flow projections for Gorenje Studio, d.o.o., which have been prepared on the basis of the adopted business plan for 2012 and strategic business plan for the period from 2013 to 2015. The main underlying assumptions used to calculate the value in use are: the revenue growth rate of 0.0% (2010: 2.0%) and the discount rate of 10.5% (2010: 9.5%).
The recoverable value of the cash-generating unit was determined to be higher than its carrying amount, including that of goodwill. Therefore there was no need for impairment of goodwill.

Impairment testing of goodwill arising from the acquisition of Gorenje Surovina, d.o.o. was carried out. The calculations are based on cash flow projections for Gorenje Surovina, d.o.o., which have been prepared on the basis of the adopted business plan for 2012 and strategic business plan for the period from 2013 to 2015. The main underlying assumptions used to calculate the value in use are: the revenue growth rate of 5.0% (2010: 3.0%) and the discount rate of 10.5% (2010: 9.5%).
The recoverable value of the cash-generating unit was determined to be higher than its carrying amount, including that of goodwill. Therefore there was no need for impairment of goodwill.

Goodwill in the amount of TEUR 705 referring to the company IG AP, d.o.o. was written down and charged against the profit for the period.

Movements of intangible assets in 2011
in TEURDevelopment costsIndustrial property rightsTrademarkGoodwillIntangible assets under constructionTotal
Cost at 1 Jan 2011 28.430 31.646 61.964 69.358 1.370 192.768
Acquisitions 2.115 1.446     2.818 6.379
Disposal of Group companies -58 -399   -705 -16 -1.178
Disposals, write-offs -331 -1.068       -1.399
Other transfers 1.545 1.039     -2.644 -60
Exchange differences -39 -138     -5 -182
Cost  at 31 Dec 2011 31.662 32.526 61.964 68.653 1.523 196.328
             
Accumulated amortisation  at 1 Jan 2011 16.334 16.273 0 0 0 32.607
Disposal of Group companies -58 -212       -270
Disposals, write-offs -257 -598       -855
Amortisation 3.921 2.510       6.431
Other transfer            
Exchange differences -46 -159       -205
Accumulated amortisation at 31 Dec 2011 19.894 17.814       37.708
             
Carrying amount at 1 Jan 2011 12.096 15.373 61.964 69.358 1.370 160.161
Carrying amount at 31 Dec 2011 11.768 14.712 61.964 68.653 1.523 158.620
Movements of intangible assets in 2010
in TEURDevelopment costsIndustrial property rightsTrademarkGoodwillIntangible assets under constructionTotal
Cost at 1 Jan 2010 27.379 34.113 61.964 69.358 856 193.670
Acquisitions 1.910 1.194     2.206 5.310
Disposal of Group companies   -1.333       -1.333
Acquisition through business combinations   380       380
Disposal, write-offs -1.775 -3.488       -5.263
Other transfers 851 676     -1.685 -158
Exchange differences 66 106     -7 165
Ownership change in joint ventures -1 -2       -3
Cost  At 31 Dec 2010 28.430 31.646 61.964 69.358 1.370 192.768
             
Accumulated amortisation at 1 Jan 2010 14.887 17.223 0 0 0 32.110
Disposal of Group companies   -618       -618
Disposal, write-offs -2.096 -3.074       -5.170
Amortisation 3.320 2.690       6.010
Other transfers 94 -190       -96
Exchange differences 130 243       373
Ownership change in joint ventures -1 -1       -2
Accumulated amortisation at 31 Dec 2010 16.334 16.273 0 0 0 32.607
             
Carrying amount at 1 Jan 2010 12.492 16.890 61.964 69.358 856 161.560
Carrying amount at 31 Dec 2010 12.096 15.373 61.964 69.358 1.370 160.161