Annual Report 2017

15. Other Intangible Assets

in thousands of EUR

Notes

Key money

Customer databases

Trademarks

Software

Other

Total

At 1 January 2016

Cost

218,061

47,780

277,927

172,762

43,653

760,183

Accumulated amortization and impairment

- 9,374

- 10,517

- 134,195

- 117,266

- 34,413

- 305,765

Carrying amount

208,687

37,263

143,732

55,496

9,240

454,418

Movements in 2016

Acquisitions

1,904

3,153

699

11

1,334

7,101

Adjustment to purchase price allocation

-

5,362

- 2,259

-

-

3,103

Additions

1,672

553

8

33,389

313

35,935

Disposals

- 657

- 56

-

- 1,367

- 13

- 2,093

Amortization charge

8

-

- 7,385

- 18,198

- 16,778

- 3,728

- 46,089

Impairment

8

- 1,860

-

- 3,050

-

-

- 4,910

Reclassification

-

59

-

275

30

364

Exchange differences

1,539

- 630

- 2,363

- 293

- 437

- 2,184

At 31 December 2016

211,285

38,319

118,569

70,733

6,739

445,645

At 1 January 2017

Cost

221,617

55,246

272,571

187,694

44,050

781,178

Accumulated amortization and impairment

- 10,332

- 16,927

- 154,002

- 116,961

- 37,311

- 335,533

Carrying amount

211,285

38,319

118,569

70,733

6,739

445,645

Movements in 2017

Acquisitions

6

1,667

118,279

27,799

6,057

12,863

166,665

Additions

3,496

706

-

38,053

17

42,272

Disposals

- 605

- 15

- 1

- 110

- 2

- 733

Amortization charge

8

-

- 9,705

- 17,999

- 19,844

- 3,757

- 51,305

Impairment

8

- 1,322

-

-

- 1,934

-

- 3,256

Reclassification

- 2,179

- 30

73

140

- 100

- 2,096

Exchange differences

- 817

- 3,106

- 3,499

- 879

- 20

- 8,321

At 31 December 2017

211,525

144,448

124,942

92,216

15,740

588,871

Cost

220,527

170,251

292,449

230,277

54,523

968,027

Accumulated amortization and impairment

- 9,002

- 25,803

- 167,507

- 138,061

- 38,783

- 379,156

Carrying amount

211,525

144,448

124,942

92,216

15,740

588,871

Key money

Key money as part of intangible assets has an indefinite useful life, relating to stores in France and Brazil. These assets are not amortized but are subject to an annual impairment test using cash flow projections covering a five-year period and the market value is used based on external valuations. Details as to the cost per square meter and latest key money transactions for the main shopping malls are publicly available.

If the calculated value in use is less than the carrying value of the assets, external valuations are performed to arrive at a fair value less costs of disposal.

During 2017 the impairment test on key money resulted in an impairment in France and Brazil of €1,322 (2016: €1,860) as a result of a decrease in value in use and external valuations performed for each store individually.

The carrying amount of the key money with an indefinite useful life is tested on a store-by-store basis and per country amounts to:

in thousands of EUR

31 December 2017

31 December 2016

France

206,967

204,222

Brazil

4,558

7,063

211,525

211,285

Key assumptions used to determine the recoverable amount:

2017

2016

Revenue growth rate

1.5%-13.0%

1.5%-14.0%

Discount rate (pre tax)

7.84%-15.86%

9.03%-19.30%

Customer databases

In 2017, the increase mainly relates to the acquisitions of Visilab and Tesco Opticians.

Trademarks

The increase in 2017 relates to the acquisition of Visilab. In 2016 the impairment of trademarks is related to the full impairment of trademark in Brazil €3,050.

Software

The Group continues with its business project iSynergy to implement a global ERP system in all countries. In 2017, the Group capitalized €20,959 (2016: €20,008) worth of licenses and expenses related to this global ERP project.

The acquisition of software in 2017 relates to Visilab. In 2017, €1,934 of software was impaired in the G4 and Americas & Asia segments (2016: none).

Other

The other intangible assets mainly comprise the Group's right to open additional optical stores in the Tesco store network of €11,600 (2016: none).