5.6 Intangible assets

Intangible assets are recognized when they are identifiable, controlled, and it is possible that the future economic benefits that are attributable to the assets will flow to the entity and it is possible to reliably measure the cost of the asset, with expected useful life longer than one year.

Intangible assets are measured at purchase costs or production costs less accumulated amortization as well as impairment losses.

The method applied to determine the fair value of intangible assets acquired in a business combination is presented in point 5.4.

Intangible assets include in particular: software, copyright, licenses, concessions, as well as assets acquired as a result of business combination transactions: trademarks, customer relations (including clients holding CDIs), broker relations, future profits from concluded insurance contracts, etc.

Intangible assets are subject to amortization over their estimated useful life:

  • intangible assets other than intangible assets acquired in a business combination - using the straight line method over the period of two to five years. If appropriate, following a case-by-case analysis, the entity may apply another amortization rate suitable for the estimated useful life of the intangible asset. As the main product system is planned to be used by PZU for ten years, the adopted annual amortization rate amounts to 10%;
  • intangible assets acquired in a business combination (except for acquired trademarks) – over the period from one to fifteen years, on the basis of the profits generated in particular years;
  • trademarks acquired in a business combination are intangible assets with an indefinite useful life and are not subject to amortization; instead, they are subject to the impairment test at the end of each financial year and each and every time when impairment indications occur.

Amortization is charged under “Other operating costs” in the consolidated statement of profit or loss.

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