Classification criteria

Intangible assets are non-monetary assets, identifiable even if not of a physical nature, that satisfy the characteristics of identification, control of the resource and the existence of future economic benefits. Intangible assets mainly include goodwill and software.

Recognition criteria

Intangible assets are recognised in the statement of financial position at cost, i.e. the purchase price and any direct cost incurred in preparing the asset for use.

Goodwill is represented by the positive difference between the acquisition cost and the fair value of the purchased company’s assets and liabilities and when such positive difference shows the capacity to give further return on the investment.

Measurement criteria

Intangible assets with a finite useful life are systematically amortised at constant rates according to their estimated useful life.

If there is objective proof that a single asset may have become impaired, a comparison is made between the carrying amount of the asset with its recoverable amount, equal to the greater between the fair value, less cost of disposal, and the related value in use, intended as the current value of future cash flows predicted to originate from this asset. Any amortisation, impairment losses and reversals of impairment losses are taken to profit or loss.

Intangible assets with an indefinite useful life are not amortised. The carrying amount is compared with the recoverable amount on an annual basis. If the carrying amount is greater than the recoverable amount, a loss equal to the difference between the two amounts is recognised in the income statement.

If the value of an intangible asset is recovered, excluding goodwill, previously impaired, the increased net carrying amount cannot exceed the net carrying amount that would have been calculated if no impairment loss had been recognised on the asset in the previous years.

Goodwill is recognised in the statement of financial position at cost, net of any accumulated losses, and is not subject to amortisation. This goodwill is annually subjected to an impairment test, by comparing its carrying amount to its recoverable amount. To this aim, goodwill must be allocated to cash generating units (CGUs) which should represent the lowest level at which management evaluates the return on investments in assets that include goodwill.

The CGU is never larger than an operating segment (under IFRS 8). Any consequent losses are calculated based on the difference between the carrying amount of the CGU and its recoverable amount, equal to the greater between the fair value of the CGU, less cost of disposal, and the relative value in use.

The amount of any impairment losses is recognised in profit and loss and is not derecognised in the following years when the conditions for having recognised the impairment losses cease to exist.

Derecognition criteria

An intangible asset is eliminated from the statement of financial position when it is disposed of or when no future economic benefits are forecasted from its use or its disposal.