LensCrafters 2013 Annual Report Download - page 125

11. GOODWILL AND INTANGIBLE ASSETS
Changes in goodwill and intangible assets as of December 31, 2012 and 2013, were as follows:
Goodwill
Trade names
and
trademarks
Customer
relations,
contracts
and lists
Franchise
agreements Other Total
As of January 1, 2012
Historical cost 3,090,563 1,576,008 229,733 22,181 464,999 5,383,484
Accumulated amortization
(660,958) (68,526) (7,491) (205,026) (942,001)
Total 3,090,563
915,050 161,208 14,690 259,973 4,441,484
Increases — 187 — — 116,819 117,005
Decreases — — — — (3,751) (3,751)
Business combinations 107,123 12,057 21,806 — 11,146 152,132
Translation difference and other (48,916) (6,572) (3,370) (255) (8,003) (67,117)
Impairment and amortization
expense —
(70,882) (15,468) (1,117) (57,831) (145,298)
Balance as of December 31, 2012 3,148,770
849,839 164,177 13,319 318,352 4,494,457
Historical cost 3,148,770 1,563,447 247,730 21,752 547,254 5,528,953
Accumulated amortization
(713,608) (83,553) (8,433) (228,902) (1,034,496)
Total as of December 31, 2012 3,148,770
849,839 164,177 13,319 318,352 4,494,457
Increases —
41
— —
100,741 100,783
Decreases —
— — —
(3,470) (3,470)
Business combinations
67,328 23,806
— —
4,107 95,241
Translation difference and other
(170,882) (44,110) (11,064) (536) (169) (226,761)
Amortization expense
- (68,683) (14,640) (1,081) (69,494) (153,897)
Balance as of December 31, 2013 3,045,216
760,894 138,473 11,702 350,068 4,306,353
Historical cost
3,045,216 1,490,809 231,621 20,811 624,468 5,412,925
Accumulated amortization —
(729,915) (93,148) (9,109) (274,400) (1,106,572)
Total as of December 31, 2013 3,045,216
760,894 138,473 11,702 350,068 4,306,353
The 2013 and 2012 increases in goodwill and intangible assets due to business combinations were mainly due
to the acquisition of Alain Mikli (Euro 92.2 million ) and Tecnol (Euro 127.2 million). Please refer to Note 4 “Business
Combinations” for further details.
Of the total amortization expense of intangible assets of Euro 153.9 million (Euro 145.3 million in 2012)
Euro 140.5 million (Euro 132.8 million in 2012) is included in general and administrative expenses, Euro 8.5 million
(Euro 6.3 million in 2012) is included in selling costs and Euro 4.9 million (Euro 6.2 million in 2012) is included in cost
of sales.
Other intangible assets includes internally generated assets of Euro 61.4 million (Euro 57.4 million as of
December 31, 2012).The increase in intangible assets is mainly due to the implementation of a new IT infrastructure,
which started in 2008.
Impairment of goodwill
Pursuant to IAS 36—Impairment of Assets, the Group has identified the following four cash-generating units
(“CGUs”): Wholesale, Retail North America, Retail Asia-Pacific and Retail Other. The cash-generating units reflect the
distribution model adopted by the Group. The CGUs are periodically assessed based on the organizational changes that
are made in the Group. There were no changes to the CGUs for fiscal 2013 and 2012.
The value of goodwill allocated to each CGU is reported in the following table (amounts in thousands of
Euro):
2013 2012
Wholesale 1,201,605 1,203,749
Retail North America 1,332,758 1,388,263
Retail Asia-Pacific 324,988 376,414
Retail Other 185,865 180,344